You Invested $5,000 in the Cog Corporation and $5,000 in the Gear

question 46

Multiple Choice

You invested $5,000 in the Cog corporation and $5,000 in the Gear corporation. Both of these corporations have $100 million in total assets. The Cog corporation had a net profit of $5 million and the Gear corporation had a net profit of $10 million. You read their annual reports and both companies had established a goal of having a net profit equal to 10% of total assets.

• A) Cog is effective but less efficient than Gear.
• B) Cog is effective and more efficient than Gear.
• C) Gear is effective but less efficient than Cog.
• D) Gear is effective and more efficient Cog.
• E) Cannot tell without more information.

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Definitions:

Substitute Product

A product that can be used in place of another, fulfilling the same needs or desires.

Chicken Prices

The market value or cost of chicken, which can fluctuate based on factors like demand, feed prices, and production costs.

Price of Beef

The cost at which beef is sold in the market, which can vary based on factors like quality, supply, and demand.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers.