Reef Corphas Revenues of $500,000 Resulting in an Operating Income of of $54,000.Invested

question 47

Multiple Choice

Reef Corp.has revenues of $500,000 resulting in an operating income of $54,000.Invested assets total $600,000,the cost of capital is 6%.Calculate the increase in residual income if sales increase by 10% and the profit margin and invested assets remain the same.

• A)$5,400
• B)$24,000
• C)$0
• D)$7,500

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Definitions:

Epinephrine

Also known as adrenaline, it is a hormone and medication which is involved in regulating visceral functions (e.g., heart rate and blood pressure).

Estrogen

A group of hormone compounds that play an essential role in the development and regulation of the female reproductive system and secondary sex characteristics.

Gonadotropin-Releasing Hormone

A hormone released by the hypothalamus that signals the pituitary gland to produce and secrete gonadotropins, which in turn regulate reproductive processes.

Androgen Binding Protein

A protein that binds androgens (male hormones), facilitating their transport within the body, particularly within the testes and blood.