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Gralyn Corp

Question 62

Multiple Choice

Gralyn Corp. compares two products' margin of safety ratios (MOS%) . Product A has a ratio of 0.13 and product B has a ratio of 0.31. Everything else held constant, what should the managers at Gralyn Corp. do and why?


A) They should choose Product A because it will cost less than half as much to produce.
B) They should choose Product A because it is less risky and might require less management attention than Product B.
C) They should choose Product B because it will produce more than double the profit of Product A.
D) They should choose Product B because it is less risky and might require less management attention than Product A.

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