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Mojo Motors Is a Small Conventional Corporation with Only 212

question 37

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Mojo Motors is a small conventional corporation with only 212 stockholders.Eleven of the stockholders are citizens of Mexico,and eight others are citizens of Canad
A.Due to its size and diversity in ownership,you would recommend that Mojo Motors change to an S-Corporation.

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Definitions:

Operating Leverage

Operating leverage is a measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed versus variable costs a company has.

Pretax Income

Income earned by a company before taxes are deducted, indicating the profitability of a company's core operations.

Sales Increase

The rise in the amount of products or services sold by a company, usually compared to a previous period.

Contribution Margin

The amount by which sales revenue exceeds variable costs, representing the contribution towards covering fixed costs and generating profit.

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