Parker Industries Is a Small Company with a Big Name!

question 130

Multiple Choice

Parker Industries is a small company with a big name! Parker Industries is actually a one-person company that imports strands of LED lights from China and sells them through its website. Parker's only overhead is a storage unit for inventory that costs $125 a month and a $25 monthly fee for website hosting. Currently, Parker imports the lights for $.99 each (including inbound shipping) and sells them for $4.49. Parker also pays shipping expenses of $.50 per light strand. If Parker is currently selling 50 units a month, what is Parker's monthly profit or loss?

• A) $0
• B) $224.50 (profit)
• C) $49.50 (profit)
• D) −$74.50 (loss)

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Definitions:

Sub-Prime Loans

These are loans offered to individuals with poor credit histories or higher risk profiles at higher interest rates than standard loans.

Low Short-Term Interest Rate

A situation where the interest rates for borrowing funds for a short period are significantly lower than usual, typically indicating a policy aimed at stimulating economic growth.

Sub-Prime Borrowers

Individuals or entities with low credit ratings, indicating a higher risk of default to lenders.

Default Rates

The percentage of borrowers who fail to repay their loans or meet their debt obligations on time, often used as a measure of credit risk.