You have a choice of investing in either of twocompanies., Alpha or Beta. Both c
ID: 2502216 • Letter: Y
Question
You have a choice of investing in either of twocompanies., Alpha or Beta. Both companies make the same productsand compete in the same markets. Over the last five years, theoperating results for the two companies have been: Alpha Beta Sales tocustomers 4,700,00 6,525,000 Profit 420,000 913,500 Return on investment per dollarinvested 4.5% 7.5% Which company is more efficient? Which is more effective? Inwhich company would you invest? State the reason for youranswer. You have a choice of investing in either of twocompanies., Alpha or Beta. Both companies make the same productsand compete in the same markets. Over the last five years, theoperating results for the two companies have been: Alpha Beta Sales tocustomers 4,700,00 6,525,000 Profit 420,000 913,500 Return on investment per dollarinvested 4.5% 7.5% Which company is more efficient? Which is more effective? Inwhich company would you invest? State the reason for youranswer.Explanation / Answer
The Profit margin as well as volume of sales is more forBeta Company.
Hence , it is more efficient as well as effective.
The Return on investment per dollar is also greater forBeta Company.
Hence , invest in Beta Co
Alpha Beta Sales to customers 4,700,000.00 6,525,000.00 Profit 420,000.00 913,500.00 Profit Margin 8.94% 14.00%