Two Technicians Are Discussing Dealership Operations

question 62

Multiple Choice

Two technicians are discussing dealership operations. Technician A says that dealerships are normally independent or corporate businesses. Technician B says that a general manager typically operates the dealership. Who is correct?

• A) A only
• B) B only
• C) Both A and B
• D) Neither A nor B

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Definitions:

Common Stock

A type of security that represents ownership in a corporation, granting holders voting rights and a share in the company's profitability through dividends and/or capital appreciation.

Fixed Costs

Costs that do not change with the level of production or sales within a short period, such as rent, salaries, and insurance.

Gross Margin Percentage

A profitability metric expressed as a percentage, calculated by subtracting the cost of goods sold from sales revenue and dividing the result by sales revenue.

Net Profit Margin

The percentage of revenue remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's total revenue.