When Determining the Rate of Return on Assets

question 114

Multiple Choice

When determining the rate of return on assets:

• A)return on assets is the product of three "drivers" according to the DuPont model.
• B)the DuPont model calculates the rate of return on assets as the net profit margin ratio times total asset turnover ratio.
• C)it is important for companies to develop strategies to decrease total asset turnover.
• D)total asset turnover measures how much every sales dollar generates in profit.

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Definitions:

Product Preference

The inclination of consumers to favor certain products over others, often based on attributes or personal tastes.

Product Adopters

Individuals or entities that start using a new product or technology shortly after it has been launched.

Laggards

A category of consumers that do not like change and may remain loyal to a product until it is no longer available for sale.

Resellers

Retailers and wholesalers that buy finished goods and resell them for a profit.