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

question 61

Multiple Choice

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%

Recognize the financial implications of leasing for both the lessee and the lessor.

Comprehend the role and terms of sale and leaseback agreements.

Identify characteristics and implications of direct leases.

Understand the criteria the CRA uses to determine the validity of a lease for tax purposes.

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Definitions:

Formula Sales Presentation

A structured approach to a sales presentation that relies on a proven sequence of steps designed to guide the potential customer toward a purchase.

Canned Introduction

A pre-scripted and rehearsed opening remark used by salespeople or presenters to start a conversation or presentation.

Open-Ended Question

An open-ended question is designed to encourage a full, meaningful answer beyond a simple yes or no.

Customer Talking Time

The duration or portion of a conversation in which the customer is speaking, often used in sales and service settings to gauge customer engagement and understanding.