A Health Store Buys Nuts in 20-Kilogram Containers and Repackages

question 47

Multiple Choice

A health store buys nuts in 20-kilogram containers and repackages the nuts for resale. The store packages the nuts in 125-gram bags, costing $0.04 each, and sells them for $2.50 per bag. Find the profit on a 20-kilogram container of nuts costing $155.00.

• A) $2.39
• B) $238.60
• C) $23.86
• D) $2386.00
• E) $0.24

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Definitions:

Full Capacity

The maximum level of output that a company can produce under normal conditions over a given time period.

EFN

Expected Funds Needed, an estimation of the additional financing a company will require in the future based on its projected growth and existing financial structure.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales and earnings without increasing leverage or debt financing.

Leverage Ratios

Financial metrics that assess the level of debt in a company's capital structure relative to its equity or assets.