BUS1750 Final Exam- Chapter 2 Questions and All Correct Answers Updated.

T/F: There is a clear relationship between revenue and net profit margin. - Answer False T/F: Gross profit is always greater than net sales revenue. - Answer False Is money that a customers owe a company considered an asset? - Answer Yes Which of the following are ways that a company can fund operations. - Answer - Selling ownership/shares in the company. - Reinvesting profits. - Borrowing money. Which of the following should a company consider if the gross margin for a product or service is lower than the industry average? - Answer All of the above. T/F: Contract manufacturing leverages economies of scale. - Answer True T/F: Straight line depreciation spreads the cost of an asset in unequal amounts over its useful life. - Answer False The fundamental financial report for determining a company' profitability is ... - Answer - income statement The phrase "the bottom line" refers to a company's - Answer Net income Which of the following are valid arguments in favor of double taxation of company profit? - Answer - Wealthy people can avoid taxes from large stock investments. - Companies are not required to pay dividends. T/F: Gross Profit must cover all of a company's expenses. - Answer True T/F: A company's net income can be used to pay out dividends to owners. - Answer True