If Howard Takes Out a One-Year Loan of $400 with a 5

question 38

Multiple Choice

If Howard takes out a one-year loan of $400 with a 5 percent annual interest rate, he will pay back a total of:

• A) $400.
• B) $440.
• C) $420.
• D) $20.

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Definitions:

Sales Mix

The relative proportions in which a company’s products are sold. Sales mix is computed by expressing the sales of each product as a percentage of total sales.

Total Profits

The sum of all profits made by a business within a certain period, after all expenses have been deducted from total revenues.

Contribution Margin Ratio

The percentage of each sales dollar remaining after variable costs have been subtracted, indicating how much contributes towards fixed costs and profit.

Fixed Expenses

Expenses that do not fluctuate with changes in production level or sales volume, such as lease payments, insurance, and property taxes.