The Following Table Shows the Price-To-Earnings Ratio for a Stereo

question 123

Multiple Choice

The following table shows the Price-to-Earnings ratio for a stereo equipment manufacturing company between 1998 and 2002. Determine the percentage change in the P/E ratios from 1998 to 1999.

• A) 15.07%
• B) 17.74%
• C) 20.72%
• D) −17.74%
• E) −15.07%

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Definitions:

Dollar Sales

The total value of sales measured in monetary terms over a specific period of time.

Pretax Income

The amount of income earned by a business before taxes are deducted.

Fixed Costs

Expenses that do not change with changes in the volume of production or sales, such as rent, salaries, and insurance.

Variable Costs

Costs that vary directly with the level of production or sales activity.