Firms That Operate in Perfectly Competitive Markets Try to

question 529

Multiple Choice

Firms that operate in perfectly competitive markets try to

• A)maximize revenues.
• B)maximize profits.
• C)equate marginal revenue with average total cost.
• D)All of the above are correct.

Compute average inventory, accounts receivable turnover ratio, and total asset turnover from given data.

Calculate and interpret dividend yield, profit margin, total asset turnover, and return on total assets.

Understand the concept and significance of days' sales uncollected and days' sales in inventory within business operations.

Apply formulae to determine various financial ratios such as current ratio, acid-test ratio, and debt to equity ratio from balance sheet data.

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Definitions:

Apparent

Clearly visible or understood; obvious.

Average Collection Period

The average number of days it takes for a company to receive payments owed by its customers.

Trade Credits

An agreement where a buyer is allowed to purchase goods or services and pay the supplier at a later scheduled date.

Business

The organized efforts and activities of individuals to produce and sell goods and services for profit.