Bob's Toys Has a fiXed Asset Turnover Rate of 1

question 368

Multiple Choice

Bob's Toys has a fixed asset turnover rate of 1.2 and a total asset turnover rate of .84. Gerold's Toys has a fixed asset turnover rate of 1.1 and a total asset turnover rate of .96. Both companies have
Similar operations. Bob's Toys:

• A) Is using its fixed assets more efficiently than Gerold's Toys.
• B) Is using its total assets more efficiently than Gerold's Toys.
• C) Is generating $1 in sales for every $1.20 in net fixed assets.
• D) Is generating $1.20 in net income for every $1 in net fixed assets.
• E) Has $.84 in total assets for every $.96 Gerold's has in total assets.

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Definitions:

Total Product Curve

A graph showing the relationship between the quantity of input used and the quantity of output produced.

Marginal Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good varies as the production volume changes.

Marginal Utility

The additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.

Consumer's Income

The total amount of income available to an individual or household to spend or save, after taxes and other deductions.