If the Total Asset Turnover of a Firm Is 1

question 7

Multiple Choice

If the total asset turnover of a firm is 1.5, total assets are $500,000, and net income is $50,000, what is the profit margin?

• A)1%
• B)5%
• C)6.7%
• D)not enough information available

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Definitions:

Positive Aspects

The beneficial or advantageous features of a situation, person, or object.

Unbalanced Relationship

A relationship where there is an unequal distribution of effort, emotion, or power between the parties involved.

Married Couple

Two individuals united by marriage, forming a legal and social partnership recognized by various institutions.

Festinger

Refers to Leon Festinger, known for cognitive dissonance theory, which suggests that we have an inner drive to hold all our attitudes and beliefs in harmony and avoid disharmony or dissonance.