Refer to Scenario 7

question 281

Multiple Choice

Refer to Scenario 7.2 below to answer the question(s) that follow.
SCENARIO 7.2: You are the owner and only employee of a company that sets odds for sporting events. Last year you earned a total revenue of $100,000. Your costs for rent and supplies were $50,000. To start this business you invested an amount of your own capital that could pay you a return of $20,000 a year.
-Refer to Scenario 7.2. A yearly normal return for your company is

• A) $20,000.
• B) $40,000.
• C) $60,000.
• D) $100,000.

Interpret the significance of operating cash flows in project evaluation.

Analyze the impact of depreciation on project costs and cash flows.

Understand the relationship between selling price, variable cost, and contribution margin.

Calculate and interpret the required rate of return for a project.

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Definitions:

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to another party if the latter has reasonably relied on that promise to their detriment.

Software Power

The capability and effectiveness of software in performing its intended functions and tasks efficiently.

Reduction in Force

A corporate strategy involving the reduction of a company's workforce to improve financial performance or adapt to changing market conditions.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise that another party has reasonably and substantially relied on, even if no formal contract exists.