With respect to Statement 4, if AMRC had used its old classification method for its leasesinstead of its new classification method, its 2009 total asset turnover ratio would mostlikely be:A. lower.B. higher.C. the same.
With respect to Statement 4, if AMRC had used its old classification method for its leasesinstead of its new classification method, its 2009 total asset turnover ratio would mostlikely be:A. lower.B. higher.C. the same.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
With respect to Statement 4, if AMRC had used its old classification method for its leases
instead of its new classification method, its 2009 total asset turnover ratio would most
likely be:
A. lower.
B. higher.
C. the same.
Expert Solution
Step 1
The asset turnover ratio calculates the value of the profits or the profits of a business in relation to its asset value. As a measure of productivity, the assets turnover ratio may be used by a firm to produce profits from its own assets.
Step 2
The more successful a corporation is in producing income from its assets, the greater the asset turnover ratio. In comparison, if an activity has a poor asset sales ratio, its assets are not used to produce revenue effectively.
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