A Company Had a Profit Margin of 8

question 33

Multiple Choice

A company had a profit margin of 8%.If net income equaled $40,000 and average total assets equaled $332,500,how much were net sales?

• A)$3,200
• B)$500,000
• C)$26,600
• D)$4,156,250
• E)$372,500

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Definitions:

Marginal Revenue Product

The additional revenue generated from employing one more unit of a relevant resource or factor of production.

Rental Cost

The expense incurred from hiring or leasing a property or equipment.

Retains Earnings

Profits that a company keeps after dividends have been paid out to shareholders, often re-invested into the business for growth, paying off debt, or other purposes.

Investment Purposes

The intention behind allocating resources, often funds, into financial assets, real estate, or business ventures aiming to generate future returns.