Review of the Financial Statements Revealed the Following for Jekyll

question 46

Multiple Choice

Review of the financial statements revealed the following for Jekyll Inc.: sales $1,250,000,net income $37,500,total assets $650,000,long-term debt $750,000,interest expense $65,000 and cost of goods sold $775,000.When preparing common-size financial statements,interest expense would be shown as

• A)10.0%.
• B)9.3%.
• C)8.4%.
• D)5.2%.

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Definitions:

Market Price

The existing selling or buying price for a service or asset in a particular trading environment.

Economic Profit

The total revenue of a business minus its total costs, including both explicit and implicit costs.

Average Variable Cost

The total variable cost divided by the total output, indicating the variable cost for producing one more unit of a good or service.