A Company Had Net Income of $43,000, Net Sales of $380,500

question 216

Multiple Choice

A company had net income of $43,000, net sales of $380,500, and average total assets of $220,000. Its profit margin and total asset turnover were, respectively:

• A) 11.3%; 19.5.
• B) 11.3%; 1.73.
• C) 1.7%; 11.3.
• D) 19.5%; 11.3.
• E) 1.7%; 19.5.

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Definitions:

Total Revenue

The total amount of money received by a company from its sales of goods or services, not accounting for any costs.

Economic Profit

The surplus generated after subtracting both direct and indirect expenses from the total revenue.

Pure Monopolist

A company or entity that is the sole provider of a particular product or service, without close substitutes, in a market.

Profit-Maximizing

The process or goal of setting production levels to achieve the highest possible profit based on current market conditions.