Which of These Statements Is True

question 3

Multiple Choice

Which of these statements is true?

• A) In general, the lower the total asset turnover and the lower the capital intensity ratio, the more efficient the overall asset management of the firm will be.
• B) In general, the lower the total asset turnover and the higher the capital intensity ratio, the more efficient the overall asset management of the firm will be.
• C) In general, the higher the total asset turnover and the lower the capital intensity ratio, the more efficient the overall asset management of the firm will be.
• D) In general, the higher the total asset turnover and the higher the capital intensity ratio, the more efficient the overall asset management of the firm will be.

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Definitions:

Management Choice

The discretion allowed to company management in selecting among various allowed accounting methods and policies in reporting financial information.

Accounting Standards

Rules and guidelines set by regulatory bodies that dictate how financial transactions and accounting practices should be recorded and reported.

Foreign Subsidiary

A company that is partially or wholly owned and controlled by a parent company but operates in a different country.