Corporations A and B have identical gross profit margins; however, Firm B has a much larger operating profit margin. Which of the following is the most likely explanation? a. Firm A faces a very high tax rate. b. Firm A pays premium wages to attract only the most best, most productive machinists, electricians, lathe operators, and other skilled shop workers. c. Firm A borrows far more money than Firm B to fund their assets. d. Firm A spends much more money on marketing their products than Firm B.

Corporations A and B have identical gross profit margins; however, Firm B has a much larger operating profit margin. Which of the following is the most likely explanation? a. Firm A faces a very high tax rate. b. Firm A pays premium wages to attract only the most best, most productive machinists, electricians, lathe operators, and other skilled shop workers. c. Firm A borrows far more money than Firm B to fund their assets. d. Firm A spends much more money on marketing their products than Firm B.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 15MC: Suppose the firm makes the change but its competitors react by making similar changes to their own...

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