What Is a Benchmark Problem

question 24

Multiple Choice

What is a benchmark problem?

• A) a difficulty encountered when attempting to bring an accounting information system up to industry best practices
• B) a method used to compare the efficiency of alternative accounting information systems
• C) the cost-benefit tradeoff defined by the relationship between increased costs and increased benefits from a system
• D) a method used to test the compatibility of a new accounting information system with existing hardware and software

---

Definitions:

Return On Total Assets

A financial metric that measures a company's earnings before interest and taxes (EBIT) relative to its total asset value.

Net Profit Margin Percentage

A financial metric that shows what percentage of a company's revenues is left over after all expenses have been deducted, indicating profitability.

Return On Equity

A financial ratio indicating the profitability of a firm in relation to shareholders' equity, showing how effectively a company uses investors' funds to generate profit.

Year 2

Typically refers to the second year of a given time frame, period of analysis, or the second year of operation or study.