A Company Requires $1700000 in Sales to Meet Its Net

question 79

Multiple Choice

A company requires $1700000 in sales to meet its net income target. Its contribution margin is 30% and fixed costs are $300000. What is the target net income?

• A) $510000
• B) $390000
• C) $700000
• D) $210000

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Definitions:

Operating Loss Carryforward

A tax provision that allows businesses to apply current year operating losses against future profits to reduce tax liability.

Deferred Liability

A liability that is recognized on the balance sheet but will be settled at some point in the future.

Tax Benefit

A tax policy that allows certain deductions, credits, or exclusions that ultimately reduce a taxpayer's burden, improving financial efficiency.

Operating Loss Carryforward

A tax provision that allows businesses to apply current year's operating losses to future profits for tax relief.