Asked by Brittney Britt on Jul 04, 2024
Verified
When a company sells used equipment for a loss, the net profit margin percentage is unaffected.
Net Profit Margin Percentage
A profitability ratio that measures the percentage of net income generated from total revenue.
Used Equipment
Previously owned machinery or tools that are available for sale and use, often at a lower cost compared to new equipment.
- Assess the impact of asset acquisitions and disposals on a company's financial metrics.
- Understand the relationship between profitability ratios and company financial decisions.
Verified Answer
AF
Adrienne FranklinJul 09, 2024
Final Answer :
False
Explanation :
If a company sells used equipment for a loss, it will decrease the company's net profit and therefore decrease the net profit margin percentage.
Learning Objectives
- Assess the impact of asset acquisitions and disposals on a company's financial metrics.
- Understand the relationship between profitability ratios and company financial decisions.
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