Profit Indicators That Might Be Considered in Applying the Comparable

question 47

Multiple Choice

Profit indicators that might be considered in applying the comparable profits method include the ratio of:

• A) operating income to operating assets.
• B) debt to equity.
• C) receivables to net sales.
• D) operating expenses to net sales.

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Definitions:

Diminishing Returns

A principle stating that if one factor of production is increased while others are held constant, the incremental increases in output will eventually decrease.

Production Possibilities

The various combinations of outputs that can be achieved with a given set of inputs and technology.

Lawns Per Day

An unconventional metric, possibly referring to the number of lawns a service can maintain within a single day.

Production Possibilities

A framework highlighting the maximum output combinations of two goods that can be produced with available resources and technology.