Using the Following Balance Sheet and Income Statement Data, What

question 159

Multiple Choice

Using the following balance sheet and income statement data, what is the debt to assets ratio? $$\begin{array} { l r l r } \text { Current assets } & \$ 7,000 & \text { Net income } & \$ 15,000 \\\text { Current liabilities } & 4,000 & \text { Stockholders' equity } & 21,000 \\\text { Average assets } & 44,000 & \text { Total liabilities } & 9,000 \\\text { Total assets } & 30,000 & &\end{array}$$ Average common shares outstanding was 10,000.

• A) 20.5 percent
• B) 30 percent
• C) 33.3 percent
• D) 40.9 percent

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Definitions:

Marginal Product

The additional output generated by adding one more unit of a specific input, while keeping other inputs constant.

Capital

Resources, such as funds or assets, used by businesses and individuals to create wealth through investment or production.

Isoquants

Curves that represent combinations of various input factors that produce the same output level.

Production Function

A mathematical relationship that describes how inputs like labor and capital are converted into outputs, representing the maximum output possible from a given set of inputs.