Bell Brothers Has R3,000,000 in Sales

question 44

Multiple Choice

Bell Brothers has R3,000,000 in sales.Its fixed costs are estimated to be R100,000, and its variable costs are equal to fifty cents for every rand of sales.The company has R1,000,000 in debt outstanding at a before-tax cost of 10 percent.If Bell Brothers' sales were to increase by 20 percent, how much of a percentage increase would you expect in the company's net income?

• A) 15.66%
• B) 18.33%
• C) 19.24%
• D) 21.50%
• E) 23.08%

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