The Margin of Safety Percentage Is Computed As

question 19

Multiple Choice

The margin of safety percentage is computed as:

• A)Break-even sales/Total sales.
• B)(Total sales - Break-even sales)/Break-even sales.
• C)Total sales - Break-even sales.
• D)(Total sales - Break-even sales)/Total sales.

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Definitions:

Long-term Investments

Long-term investments are assets that a company intends to hold for more than one fiscal year, including stocks, bonds, real estate, and other securities.

Future Expansion

Planning and preparing for growth in business operations, often involving strategic investments in facilities, technology, or workforce.

Intangible Assets

Assets that lack physical substance but have value due to the rights and advantages they provide to the business, such as patents, copyrights, and trademarks.

Uncertain Benefits

Advantages or gains that are not guaranteed or clearly defined, often associated with investments or business ventures.