Which of the Following Is an Example of an External

question 3

Multiple Choice

Which of the following is an example of an external benefit?

• A) a ton of coal burned in a power plant to produce electricity
• B) a car accident that crowds a major Los Angeles freeway
• C) the production of a slice of pizza
• D) the cleanup of a large lake
• E) the consumption of a can of Mt. Dew

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Definitions:

Asset Turnover Ratio

A financial metric that measures the efficiency of a company using its assets to generate sales or revenue.

Earnings Per Share

A financial ratio indicating the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.

Net Income

is the profit a company makes after deducting all costs and expenses from its total revenue, including taxes and interest.

Interest Expense

The cost incurred by an entity for borrowed funds, which can include payments on loans, bonds, or lines of credit.