Scenario 5.3: Wanting to Invest in the Computer Games Industry, You Select

question 143

Multiple Choice

Scenario 5.3:
Wanting to invest in the computer games industry, you select Whizbo, Yowzo and Zowiebo as the three best firms. Over the past 10 years, the three firms have had good years and bad years. The following table shows their performance:

-Refer to Scenario 5.3. The expected revenue from all three companies combined is:

• A) $11 million
• B) $17.9 million.
• C) $25.5 million.
• D) $29.5 million.
• E) $48 million.

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Definitions:

Credit Sales

Sales made on credit, where the payment is received after the service or good is delivered.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Credit Sales

Sales transactions where the payment is deferred to a future date, as opposed to cash sales where payment is made immediately.

Raw Materials

The basic materials and substances used in the initial stages of production before being transformed into final products.