8- If an organization\'s nonoperating activities are profitable in a given year,
ID: 2634338 • Letter: 8
Question
8- If an organization's nonoperating activities are profitable in a given year, which of the following statements is most likely to be true?
A) Total margin will be less than operating margin.
B) Total margin will be greater than operating margin.
C) Total margin will be equal to operating margin.
D) Total margin will be indeterminate.
E) None of the above statements is true.
9- All else held constant, which of the following would be expected to improve a company's economic value added (EVA)?
A) An increase in revenues
B) A decrease in costs
C) A decrease in assets
D) A decrease in the corporate cost of capital
E) All of the above
10- Assume St. Anthony's total asset turnover is 2.5 and the industry median is 1.9. Which of the following conclusions can St. Anthony's managers draw with certainty?
A) St. Anthony's is using its assets more productively than competitors in the industry are.
B) St. Anthony's assets are older than the assets of competitors in the industry.
C) St. Anthony's generates more revenue than competitors in the industry do.
D) All of the above conclusions can be drawn with certainty.
E) None of the above conclusions can be drawn with certainty.
Explanation / Answer
8. If an org nonoperating activites are profitable in a given year, Which of the following statements is most likely to be true? TOTAL MARGIN WILL BE GREATER THAN OPERATING MARGIN
9. All else held constant, Which of the following would be expected to improve a company's economic value adde (EVA)? E) ALL OF THE ABOVE! = INCREASE IN REVENUES, DECREASE IN COSTS, DECREASE IN ASSETS, DECREASE IN CORP COST OF CAPTITAL.
10. Assume St. Anthony's total asset turnover is 2.5 and the industry median is 1.9. Which of the following conclusions can St. Anthony's managers draw with certainty? E) NONE OF THE ABOVE CAN BE DRAWN WITH CERTAINTY.
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