Resolute Company Sells Two Generators-Model a and Model B-For $456

question 293

True/False

Resolute Company sells two generators-Model A and Model B-for $456 per unit and $394 per unit,respectively.The variable cost of Model A is $406 per unit and of Model B is $304 per unit.The company will generate lower revenues but a higher net income if it sells more of Model B than Model A.

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Definitions:

Debt-to-equity Ratio

A financial measure that reflects the balance of debt and equity used in funding a company's assets.

Receivable Turnover

A financial metric that measures how many times a company can turn its accounts receivable into cash during a period.

Inventory Turnover

A financial metric that measures how many times a company has sold and replaced its inventory over a certain period of time.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets, calculated as current assets divided by current liabilities.