Wittels Corporation Has Provided the Following Data In Year 2, the Company's Net Operating Income Was $42,571

question 29

Multiple Choice

Wittels Corporation has provided the following data: $\begin{array}{lrr}&\text { Year 2 } & \text { Year 1 } \\\text { Total assets }&\$ 1,253,000 & \$ 1,230,000 \\\text { Total liabilities }&\$ 586,000 & \$ 570,000 \\\text { Total stockholders' equity }&\$ 667,000 & \$ 660,000\end{array}$ In Year 2, the company's net operating income was $42,571, its net income before taxes was $21,571, and its net income was $15,100. The company's equity multiplier is closest to:

• A)1.14
• B)0.53
• C)0.88
• D)1.87

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Definitions:

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the cost of producing one more unit.

Market Price

The contemporary pricing at which a good or service is available for trading in a market context.

Purely Competitive Market

An economic setup marked by the presence of numerous small-sized companies, identical products, and straightforward market entry and exit, culminating in firms accepting prevailing market prices.

Cost Data

Information related to the expenses incurred in the production of goods or services, including materials, labor, and overhead costs.