ABC Company Accepted a National Credit Card for a $9,000

question 121

Multiple Choice

ABC Company accepted a national credit card for a $9,000 purchase.The cost of the goods sold is $7,200.The credit card company charges a 3% fee.What is the impact of this transaction on net operating income?

• A)Increase by $1,746.
• B)Increase by $1,800.
• C)Increase by $1,530.
• D)Increase by $8,730.

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Definitions:

Internal Rate Of Return

A financial metric used to evaluate the profitability of potential investments, representing the interest rate at which the net present value of all the cash flows from a project or investment equals zero.

Labor Savings

A reduction in the amount of labor required or a decrease in labor costs, often as a result of improved efficiency or automation.

Useful Life

The estimated period over which an asset is expected to be used before it is fully depreciated.

Profitability Index

A ratio that compares the present value of future cash flows of a project to its initial investment, used to assess the desirability of projects.