Use the Following Information for Questions

question 70

Multiple Choice

Use the following information for questions:
Review of the financial statements revealed the following for Sonoma Inc.: Sales $1,250,000, Net income $37,500, Total assets $650,000, Long-term debt $750,000, Interest expense $65,000 and Cost of goods sold $775,000.
-Assuming a corporate tax rate of 35%, what is the company profit margin ratio closest to?

• A)12.3%
• B)9.7%
• C)6.4%
• D)4.8%

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Definitions:

Permanent Break

A cessation or end of a situation, relationship, or agreement that is intended to last indefinitely, with no expectation of resumption.

Improvement Opportunity

A situation or instance that can be modified or enhanced to increase efficiency, effectiveness, or satisfaction.

Golden Rule

A principle that encourages treating others as one would want to be treated, emphasizing empathy and ethical conduct in interpersonal interactions.

Ethical Customer Service

A business practice that involves providing services to customers in a manner that is fair, transparent, and respectful to both consumer rights and wellbeing.