XYZ CorpHas a Profit Margin of 7%,a Debt Burden of

question 105

Multiple Choice

XYZ Corp.has a profit margin of 7%,a debt burden of .8,and has financed two-thirds of its assets through equity.What asset turnover ratio is necessary to achieve an ROE of 18%?

• A) 1.26
• B) 1.61
• C) 2.14
• D) 4.02

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Definitions:

Equivalent Unit

A measure used in cost accounting to represent a portion of a product in terms of a completed unit.

Cost Reconciliation

The process of analyzing and adjusting the differences between reported costs and actual costs, ensuring accuracy in financial reporting.

Partially Completed Production

Inventory that consists of items in the process of being manufactured but are not yet fully completed.

Equivalent Units

A term used in cost accounting to express the amount of materials or labor consumed in terms of fully completed units of output.