A Forecast Using a Percentage of Sales Model Expects Sales

question 118

Multiple Choice

A forecast using a percentage of sales model expects sales to increase by 5% over each of the next four years.If costs are proportional to sales at 80%, and last year's sales were $1,000, the net income in the fourth year will be:

• A)$48.62
• B)$145.86
• C)$227.60
• D)$243.10

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Definitions:

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Decreased Percentage

A reduction in the ratio or fraction of a part in comparison to the whole, often expressed in terms of 'per hundred' (percent).

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Opioid Dependency

A physical or psychological reliance on opioids, a class of drugs often used for pain relief.