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:

Significant Variances

Large or meaningful differences between planned and actual figures in budgeting or accounting, requiring investigation.

Over Budget

Over budget refers to a situation where actual spending exceeds the planned or allocated amount for a particular budget category.

Budget

An estimate of income and expenditure for a set period of time, often used as a plan for financial operations.

Activity Base

A measure used for allocating costs to cost objects, typically related to the level of activity or volume of goods produced that incurs costs.