How Will a Percentage of Sales Models Treat Cost of Goods

question 62

Multiple Choice

How will a percentage of sales models treat cost of goods sold if sales revenues are expected to grow by 20% to $1 million? Cost of goods sold will:

• A)Grow at a slower rate than sales
• B)Remain proportionate to sales
• C)Be forecast to increase at the rate of inflation
• D)Increase to $800,000

---

Definitions:

Forward Trade

A financial contract agreement to buy or sell an asset at a future date at a predetermined price.

Currency Exchange

The process of converting one currency into another currency.

Spot Exchange Rate

The current price at which one currency can be exchanged for another for immediate delivery.

Spot Trade

A transaction that involves the immediate exchange of one currency or commodity for another, settling immediately or within a short period.