The Apple Pie Company Had Net Income of $47,500,earnings Per

question 62

Multiple Choice

The Apple Pie Company had net income of $47,500,earnings per share of $3.17 and declared dividends per share of $2.00 during 2010.On December 31,2010,the stock had a market price of $18.50 per share.What is Apple Pie's price/earnings ratio?

• A)9.25
• B)8.11
• C)5.84
• D)0.17

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Definitions:

Production Function

A mathematical model that describes the relationship between input quantities and the resultant output of goods or services.

Labor

The utilization of human physical and mental capacities in the creation process of goods and services.

Factor Prices

The prices of the input resources (labor, capital, land, and entrepreneurship) used in the production of goods and services.

Production Function

A mathematical representation showing the relationship between input factors, such as labor and capital, and the output of goods or services they produce.