Which One of the Following Statements Is Correct

question 21

Multiple Choice

Which one of the following statements is correct?

• A) If the debt-to-assets ratio is greater than 0.50, then the debt-to-equity ratio must be less than 1.0.
• B) Long-term creditors would prefer the times interest earned ratio be 1.4 rather than 1.5.
• C) The assets-to-equity ratio can be computed as 1 plus the debt-to-equity ratio.
• D) To realize the best risk and reward profile, financial leverage should be maximized.
• E) None of the above is correct.

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Definitions:

MTS (Make-to-Stock)

A production strategy where companies manufacture products in anticipation of demand and keep an inventory to quickly meet that demand.

Production Managers

Professionals responsible for overseeing the manufacturing processes, ensuring that production runs smoothly, efficiently, and meets quality standards.

Workcenter

A specific physical location where tasks are performed, often used in manufacturing and project planning.

Manufacturing Cell

An arrangement of machinery and workers in which the production process is broken down into simpler steps, and all necessary equipment and staff are located close to each other to increase efficiency.