Bell Brothers Has $3,000,000 in Sales

question 29

Multiple Choice

Bell Brothers has $3,000,000 in sales.Its fixed costs are estimated to be $100,000, and its variable costs are equal to fifty cents for every dollar of sales.The company has $1,000,000 in debt outstanding at a before-tax cost of 10 percent.If Bell Brothers' sales were to increase by 20 percent, how much of a percentage increase would you expect in the company's net income?

• A)15.66%
• B)18.33%
• C)19.24%
• D)21.50%
• E)23.08%

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