A Company Had $6,992,000 in Net Income for the Year

question 250

Multiple Choice

A company had $6,992,000 in net income for the year.Its net sales were $15,200,000 for the same period.Calculate its profit margin.

• A)85.4%.
• B)117.1%.
• C)53.9%.
• D)217.1%.
• E)46.0%.

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Definitions:

Acceptable Earnings Rate

The minimum rate of return on investment that a company or investor is willing to accept, considering the risk and opportunity cost of the investment.

Useful Life

The estimated period over which a fixed asset is expected to be usable by the business, impacting depreciation calculations.

Salvage Value

An estimation of what an asset will be worth at the end of its usable life.

Payback Period

This is the length of time required to recover the initial investment cost of a project, calculated by dividing the investment amount by the annual cash inflows.