Suppose Firms Follow Similar Financing Policies, Face Similar Risks, Have

question 21

True/False

Suppose firms follow similar financing policies, face similar risks, have equal access to capital, and operate in competitive product and capital markets.Under these conditions, then firms that have high profit margins will tend to have high asset turnover ratios, and firms with low profit margins will tend to have low turnover ratios.

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Definitions:

Expectancies

Beliefs about the likelihood of a particular outcome as a result of one's actions or behaviors.

Process Theories of Motivation

Theories that focus on the psychological and behavioral processes influencing individuals’ motivation, including how they make decisions about their behavior in relation to their goals.

Expectancy Theory

A motivational theory suggesting that individuals are motivated to act in certain ways based on the expectation that their actions will lead to desired outcomes.

Instrumentality

Is a person’s belief that various outcomes will occur as a result of task performance.