A Total Asset Turnover of 3 Means That Every

question 50

Multiple Choice

A total asset turnover of 3 means that every

• A)$1 in sales is supported by $3 of assets.
• B)$3 in assets produces $1 in net earnings.
• C)$1 in total assets is replaced on average every 3 years.
• D)$1 in assets produces $3 in sales.

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Definitions:

Semiannual

Occurring twice a year; pertaining to a period of six months.

Interest Earn

The income received by an investor for lending funds or depositing money in interest-bearing accounts.

Compounded Monthly

This refers to the process where interest is added to the principal balance of a loan or deposit on a monthly basis, allowing the interest to earn interest in subsequent months.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specific rate of return.