The Income Statement of Berrima Barbed Wire Ltd Is

question 27

Multiple Choice

The income statement of Berrima Barbed Wire Ltd is:

If revenue increased by 30 per cent, with no effect on expenses other than income tax, what would be the effect on net after tax profit?

• A) It would increase by $6600.
• B) It would decrease by $6600.
• C) It would increase by $4620.
• D) It would decrease by $4620.

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Definitions:

Portfolio Diversification

A strategy for managing risk that involves diversifying a portfolio with a broad range of investments to reduce the effect of the performance of any individual asset.

Security

A financial instrument that represents ownership (stocks), a creditor relationship (bonds), or rights to ownership (options) that can be bought and sold.

Expected Return

The weighted average of the probable returns of an investment, considering all possible outcomes and their likelihoods.

Standard Deviation

A statistical index that measures how much data values deviate from each other within a dataset.