Quick Cement Has a Return on Assets of 8

question 121

Multiple Choice

Quick Cement has a return on assets of 8%.If it has $1.5 million in total assets and a total asset turnover of 2, it follows that the firm must have a net profit margin of

• A)4%.
• B)6%.
• C)8%.
• D)12%.

---

Definitions:

Wells Serviced

The number of wells maintenance, repair, or service operations have been performed on, typically in the oil and gas industry.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of changes in production level or sales volume, such as rent, salaries, or insurance.

Budgeting

The process of creating a plan to spend money, outlining an organization's financial and operational goals.

Flexible Budget

A budget that molds itself to fit changes in the volume or intensity of activity.