15. You invested $5,000 in the Cog Corporationand $5,000 in the Gear Corporation
ID: 2457977 • Letter: 1
Question
15. You invested $5,000 in the Cog Corporationand $5,000 in the Gear Corporation. Both of thesecorporations have $100 million in total assets. The CogCorporation had a net profit of $5 million and the Gear Corporationhad a net profit of $10 million. You read their annualreports and both companies had established a goal of having a netprofit equal to 15% of total assets:
(a) Cog is more effective than Gear.
(b) Cog is more efficient than Gear.
(c) Gear is more effective than Cog.
(d) Gear is more efficient than Cog.
(e) Cannot tell without more information.
16. In order to determine the breakeven point,we must identify several variables. At a minimum we mustknow:
(a) Fixed costs.
(b) Variable costs.
(c) Sales.
(d) All of the above.
17. Break-even analysis is the process ofdetermining ____________________ before we begin earning aprofit.
(a) How many units must be produced or how much revenue must beobtained.
(b) How much net profit will be made or how many units will beproduced.
(c) How much revenue must be obtained or how much net profit will bemade.
(d) What price we will charge for a product or how many units must beproduced.
Explanation / Answer
15 c Gear is more effective thanCrog. 16 d All of above 17 a How many units must be produced or how much revenue must be obtained
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