The profit multiplier used by service firms measures:

Question

Quizplus · Accepted Answer

The profit multiplier is a measure of the net revenue generated by a service firm. It is calculated by dividing the firm's total revenue by its expenses, excluding non-cash expenses such as depreciation. This measure is used to assess the profitability of the firm and is particularly useful for service firms because they do not have tangible products with which to calculate profit margins. Therefore, choice C is the correct answer. Efficiency, effectiveness, collectability, and accountability are important considerations for service firms, but they are not directly measured by the profit multiplier.

The Profit Multiplier Used by Service Firms Measures