Which of the Following Statements Is True

question 118

Multiple Choice

Which of the following statements is true?

• A)Inventory computerization has tended to lower inventory levels.
• B)Our capacity utilization rate is usually between 50 and 70 percent.
• C)Firms will most likely borrow money for investment when the expected rate of profit is equal to the interest rate.
• D)Investment will be high when the capacity utilization rate is low.

---

Definitions:

Earnings Per Share

A measure of a company's profitability calculated by dividing its net income by the number of outstanding shares of its common stock.

Net Profit Margin Ratio

A profitability ratio calculated by dividing net income by net sales, showing how much profit a company makes for every dollar of its sales.

Gross Sales Revenue

the total amount of sales generated by a business before any deductions are made.

Sales Returns

Sales Returns represent the goods returned by customers to the seller, which leads to a reversal of sales revenue.