26. Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.

Two manufacturing companies operating in the same industry have different net fixed asset turnover ratios. The difference most likely occurs because the company with the:

Select exactly 1 answers from the following:
A. lower ratio was more efficient in managing inventory.
B. lower ratio had significantly higher amortization expense for the year.
C. higher ratio was operating with older equipment that had a low cost basis.
D.higher ratio recently invested a substantial amount in new plant and equipment.
答案和详解如下！
Feedback: Correct answer: C

揂nalysis of Financial Statements,?Ch. 10, pp. 319?58 and Exhibits 10.1, 10.2, and 10.3, Investment Analysis and Portfolio Management, 7th edition, Frank K. Reilly and Keith C. Brown (Dryden, 2003), pp. 327?28

2006 Modular Level I, Vol. II, pp. 652-653

Study Session 8-35-c

calculate and interpret the various components of the company抯 return on equity using the original and extended DuPont systems and a company抯 financial ratios relative to its industry, to the aggregate economy, and to the company抯 own performance over time

A company operating with old, low-cost equipment that is likely to be fully depreciated would tend to have a high fixed asset turnover ratio.