You invested $5,000 in the Cog corporation and $5,000 in the Gear corporation. Both of these corporations have $100 million in total assets. The Cog corporation had a net profit of $5 million and the Gear corporation had a net profit of $10 million. You read their annual reports and both companies had established a goal of having a net profit equal to 15% of total assets.

Question

Quizplus · Accepted Answer

Efficiency is measured by the ratio of net profit to total assets. Gear has a higher net profit ($10 million) compared to Cog ($5 million) with the same total assets, making Gear more efficient.

You Invested $5,000 in the Cog Corporation and $5,000 in the Gear