Which of the Following Provides the best Rationale Regarding Analysts

question 61

Multiple Choice

Which of the following provides the best rationale regarding analysts' views about the information value of the gross profit rate versus the gross profit amount?

• A)The gross profit amount is more informative than the gross profit rate because it is a dollar amount rather than a ratio.
• B)The gross profit amount is less informative than the gross profit rate because the latter presents a meaningful relationship between gross profit and net sales.
• C)The gross profit amount is more informative than the gross profit rate because the gross profit rate is only used to describe a few industries while the gross profit amount is universally used.
• D)The gross profit amount is more informative than the gross profit rate because high volume operations are able to calculate the gross profit rate but not the gross profit amount.

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Definitions:

Social Psychologists

Experts who study how individuals think, feel, and behave in social contexts, including group dynamics and interpersonal relationships.

Tendency

An inclination or predisposition towards a particular way of thinking, behaving, or reacting, often influenced by past experiences or innate characteristics.

Admiration

A feeling of wonder, pleasure, or approval for something or someone that impresses you deeply.

Political Scientist

An expert or scholar who studies the origin, development, and operation of political systems and political behavior.