Which of the Following Statements About the Profit Margin Is

question 10

Multiple Choice

Which of the following statements about the profit margin is NOT true?

• A) The profit margin indicates the percentage of sales revenue that ends up as profit.
• B) If gross margin increases, the profit margin must increase.
• C) If the asset turnover ratio remains constant and the profit margin increases, return on assets must have increased.
• D) If the sales price decreases and expenses stay consistent, the profit margin will decrease.

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Definitions:

Methyl Branches

Groups consisting of one carbon atom bonded to three hydrogen atoms (-CH3), attached to the main chain of organic molecules.

Continuous Carbon Chain

Organic chemistry term for a series of carbon atoms connected by single or multiple bonds without branching or forming rings.

Ethylpentane

A chemical compound that is a type of hydrocarbon, specifically an alkane with the chemical formula C7H16.

Methylhexane

A type of hydrocarbon with a branched-chain structure, used in organic chemistry and industrial applications.