If a Company Has Only Variable Costs and Its Sales

question 85

True/False

If a company has only variable costs and its sales revenue increases by 20%, its profit will increase by an amount larger than 20%.

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Definitions:

Offering Price

The price at which shares of a company are made available for sale to the public during an initial public offering (IPO) or secondary offering.

Market Price

The current financial value at which an asset or service can be acquired or disposed of in the market.

Ownership Position

The stake or interest that a person or entity has in an asset.

Shares Outstanding

The total number of shares that are currently owned by all shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.