The Primary Purpose of Deregulation Is to

question 5

Multiple Choice

The primary purpose of deregulation is to

• A) decrease competition in the affected industries.
• B) remove certain industries from old-line economic regulations.
• C) protect the natural environment.
• D) allow natural monopolies to form.

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Definitions:

Average Sale Period

This measure indicates the average duration it takes for a company to turn its inventory into sales.

Operating Cycle

The duration of time from the acquisition of inventory to the collection of cash from receivables, reflecting the company's efficiency in using its assets.

Times Interest Earned

A financial ratio that measures a company's ability to cover its interest charges with its earnings before interest and taxes (EBIT).

Debt-To-Equity Ratio

A calculation to determine a firm's financial leverage by dividing the total amount of its liabilities by the equity of its shareholders.