Which of the Following Statements Regarding Gross Profit Percentage Is

question 167

Multiple Choice

Which of the following statements regarding gross profit percentage is not correct?

• A)It is possible for a company to increase both its gross profit percentage and net income without increasing the dollar amount of sales.
• B)A decreasing gross profit percentage means that the company is selling products for a greater markup over its cost.
• C)The gross profit percentage measures the percentage of profit earned on each dollar of sales.
• D)Gross profit percentages vary across industries.

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Definitions:

Exchange Rate Risk

The possibility of losing value in international financial transactions due to fluctuations in the currency exchange rates.

Manage Exchange Rate

Strategies or practices employed by individuals, businesses, or countries to mitigate or take advantage of fluctuations in exchange rates.

London Interbank Offer Rate (LIBOR)

The rate most international banks charge one another for overnight Eurodollar loans.

Note Issuance Facility (NIF)

Large borrowers issue notes up to one year in maturity in the Euromarket. Banks underwrite or sell notes.