Jerome Corp

question 49

Multiple Choice

Jerome Corp.has fixed costs of $500,000 and a contribution margin ratio of 40%.Currently,sales are $3,000,000.What is Jerome's margin of safety?

• A)$1,750,000
• B)$3,500,000
• C)$5,250,000
• D)$7,000,000

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Definitions:

Financial Companies

Businesses that provide financial services to commercial and retail customers, such as banks, investment companies, insurers, and loan providers.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual rate.

Price of Money

Often refers to the interest rate, which is the cost charged by lenders for borrowing money or the rate of return expected by investors for lending money.

Time Preference

The economic principle that people prefer to receive goods or services sooner rather than later, reflecting the relative valuation placed on immediate versus future consumption.