Table 44
Mr -Using the Information in Table 4

question 4

Multiple Choice

Table 4.4
Mr. Lee is considering a capacity expansion for his supermarket. The annual sales projected for the next five years follow. The current capacity is equivalent to $300,000 sales. Assume a 20 percent pretax profit margin.
$$\begin{array} { | c | c | } \hline \text { Year } & \begin{array} { c } \text { Annual Sales } \\( \$ 000 ) \end{array} \\\hline 1 & 310 \\2 & 320 \\3 & 340 \\4 & 370 \\5 & 400 \\\hline\end{array}$$
-Using the information in Table 4.4,if Lee expands the capacity to an equivalent of $360,000 sales now (year 0) ,how much would pretax cash flow in year 1 increase because of this expansion?

• A) less than $3000
• B) more than $3000 but less than $5000
• C) more than $5000 but less than $7000
• D) more than $7000

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Definitions:

Muscular Strength

The highest level of force that can be generated by a muscle or a collection of muscles during one attempt.

Vital Tissues

Tissues in the body that are essential for life, including the heart, brain, and lungs, which require a constant supply of nutrients and oxygen.

Muscular Endurance

The ability of a muscle or group of muscles to sustain repeated contractions or to continue applying force against a fixed object for an extended period.

Cardiorespiratory Fitness

The capacity of the heart, lungs, and circulatory system to provide oxygenated blood to muscles in action throughout extended periods of physical exercise.