RAM Auto Parts' CEO Wants to Obtain Additional Financing from the Company's

question 29

Short Answer

RAM Auto Parts' CEO wants to obtain additional financing from the company's bank. The banker wants to know the company's margin of safety. If revenues of the company for the current year total $4 million, widgets are sold at $20 per unit, the variable cost per unit is $16, fixed costs are $500,000, how much is the margin of safety? a. 12.5%
B) 80.0%
C) 96.9%
D) 37.5%

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Definitions:

Sleep-Wake Shift

A change or disruption in the normal sleep cycle, often referring to alterations in the timing of sleep due to various factors such as work schedule changes, travel, or health conditions.

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An internal mechanism in living organisms that controls the cycle of biological activities and processes.

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Chemical messengers produced by endocrine glands that regulate various processes in the body including growth, metabolism, and mood.

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A medical condition characterized by excessive body fat that may impair health.