Financial Statements for Narita Company Appear Below -Narita Company's Debt-To-Equity Ratio at the End of Year 2

question 64

Multiple Choice

Financial statements for Narita Company appear below:

$\begin{array}{|l|r|}\hline & \begin{array}{r}\text { Larned Company } \\\text { Income Statement }\end{array} \\& \text { For the Year Ended December 31, Year } 2\\ & \text { (dollars in thousands) } \\\hline \text { Sales (All on Account) } & \$ 2570 \\\hline \text { Costs of Goods Sold } & \$ 1790 \\\hline \text { Gross Margin } & \$ 780 \\\hline \text { Operating Expenses } & \$ 310 \\\hline \text { Net Operating Income } & \$ 470 \\\hline \text { Interest Expense } & \$ 30 \\\hline \text { Net Income before Taxes } & \$ 440 \\\hline \text { Income Taxes (30\%) } & \$ 132 \\\hline \text { Net Income } & \$ 308 \\\hline\end{array}$
-Narita Company's debt-to-equity ratio at the end of Year 2 was closest to which of the following?

• A) 0.17 to 1.
• B) 0.25 to 1.
• C) 0.42 to 1.
• D) 0.58 to 1.

Grasp the principle of derived demand in labor and resource markets.

Recognize the role of diminishing marginal productivity in determining labor demand.

Identify how resource pricing affects the allocation of resources and ultimately influences firm’s costs and profits.

Understand the impact of market structures (pure competition versus imperfect competition) on resource demand and labor hiring.

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Definitions:

Producer Surplus

The difference between what producers are willing to sell a product for and the actual price they receive, representing their benefit or surplus.

Minimum Acceptable Price

The lowest price at which a seller is willing to sell a product or service.

Consumer Surplus

The gap between what consumers are ready and able to shell out for a good or service and what they indeed spend on it.

Equilibrium Point

An equilibrium in the market where demand meets supply, causing price levels to remain unchanged.