Which of the Following Statements Is True

question 35

Multiple Choice

Which of the following statements is true?

• A)In stable industries, such as retailers, the gross profit margin is generally volatile from year to year.
• B)Gross profit margin and operating profit margin are complements of each other and the two percentages add up to 100%.
• C)Fixed costs do not vary proportionately with volume changes but remain the same within a relevant range of activity.
• D)In capital intensive industries sales volume changes result in a stable gross profit margin.

---

Definitions:

Interest Income

Earnings from investment in interest-bearing financial instruments, such as savings accounts, CDs, or bonds.

FMV

Fair Market Value (FMV) is the estimated price that an asset would sell for on the open market between a willing buyer and a willing seller.

Basis

The initial cost of an asset, adjusted for factors such as depreciation or improvements, used to calculate capital gains or losses for tax purposes.

Debt

Debt represents money borrowed by one party from another under the condition that it is to be repaid, usually with interest.