The Owner of a Tobacco Shop Has Estimated Net Sales

question 77

Multiple Choice

The owner of a tobacco shop has estimated net sales of $75,100 for next year, with her gross cost of goods sold equalling 35 percent of net sales. Her maintained markup percentage should be:

• A) 75 percent
• B) 65 percent
• C) 150 percent
• D) 11.85 percent
• E) Cannot be determined from the information given

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Definitions:

ROE

Return on Equity, a measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.

Expected Earnings

The forecasted income of a company, often used by investors to gauge the company's future profitability.

Common Shareholders' Equity

The amount of money that would be returned to shareholders if all the company's assets were liquidated and all its debts paid off.

Replacement Cost

The cost to replace an asset with another of similar kind and quality at current prices, without deduction for depreciation.