What Amount Would You Find on Financial Statements of Merchandising

question 10

Multiple Choice

What amount would you find on financial statements of merchandising companies that is referred to as finished goods inventory for a manufacturing company?

• A)purchases
• B)cost of goods purchased
• C)merchandise inventory
• D)raw materials inventory

---

Definitions:

Net Income

The total profit of a company after all expenses, including taxes and operating expenses, have been subtracted from total revenue.

Net Present Value

A method used in capital budgeting to assess the profitability of an investment by calculating the present value of expected cash flows minus the initial investment cost.

Average Rate of Return

A metric used to evaluate the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.

Capital Investment Proposals

Suggestions or plans for spending on long-term assets intended to improve a company's profitability in the future.