Ash Company Reported Sales of $400,000 for Year 1, $450,000

question 99

Multiple Choice

Ash Company reported sales of $400,000 for Year 1, $450,000 for Year 2, and $500,000 for Year 1. Using Year 1 as the base year, what is the revenue trend percent for Years 2 and 3?

• A)125% for Year 2 and 112.5% for Year 3.
• B)80% for Year 2 and 90% for Year 3.
• C)88% for Year 2 and 80% for Year 3.
• D)112.5% for Year 2 and 125% for Year 3.
• E)88% for Year 2 and 90% for Year 3.

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Definitions:

Economic Losses

Occurs when a company's total costs exceed its total revenues, indicating that the business is not efficiently allocating its resources.

Economic Profits

Profits exceeding the opportunity costs of a company's resources, indicating it is generating returns beyond the next best alternative.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, in economic theory, representing the surplus generated by an entity in economic activities.

Long-run Equilibrium

A state where all factors of production can be varied, and all economic participants have fully adjusted to any changes, leading to a stable economic condition.