Which One of the Following Is the Most Useful Measure

question 27

Multiple Choice

Which one of the following is the most useful measure for comparing the risk of two alternative products?

• A) Contribution margin ratio.
• B) Margin of safety ratio (MOS%).
• C) Financial leverage.
• D) Breakeven point.
• E) Gross profit ratio.

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Definitions:

Defined Benefit Pension Plan

A pension plan where an employer promises a specific payout upon retirement, based on factors like salary history and employment duration.

Pension Expense

The cost recognized by an employer for providing retirement benefits to employees over the current accounting period.

Expected Return

The predicted average of the probabilities of various returns an investment can generate, reflecting the anticipated earnings or loss.

Actuarially Assumed

Refers to statistical calculations and estimates made by actuaries, often related to insurance and pension fund liabilities.