Given the Following Data: EBIT = 400; Tax = 100;

question 28

Multiple Choice

Given the following data: EBIT = 400; Tax = 100; Sales = 3000; Average Total Assets =
1500, calculate net profit margin:

• A) 10%
• B) 18.3%
• C) 7.5%
• D) None of the above

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Definitions:

Excess Capacity

A situation in which a firm or industry has more resources available, particularly production capabilities, than is being utilized due to insufficient demand.

Monopolistic Competition

A market structure characterized by many sellers selling products that are similar but not identical, allowing for limited control over market prices.

Excess Capacity

A situation where a company can produce more goods or services than currently demanded, often leading to inefficiencies and lowered prices.

Monopolistically Competitive

Characterizes a market structure where many firms sell products that are similar but not identical, allowing for some degree of market power in setting prices.