Second Chance Is a Paperback Book Exchange

question 12

Multiple Choice

Second Chance is a paperback book exchange. For each book trade, the buyer pays a $1 trade fee. Books that are sold and not traded cost half of their original purchase price. The store has total assets of $126,000 and current assets of $40,200. Its net sales equaled $35,000, and its net profit after taxes was $9,000. Calculate the store's net profit percentage.

• A) 7.1%
• B) 21.7%
• C) 22.4%
• D) 25.7%
• E) 27.7%

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Definitions:

Call Price

The price at which a bond or a preferred stock can be redeemed by the issuer before its maturity date.

Interest Rates

The price of borrowing money, expressed as a percentage of the amount borrowed, set by lenders as compensation for the risk and the opportunity cost of lending.

Floating-rate Bonds

Bonds with a variable interest rate that adjusts periodically in accordance with a benchmark interest rate or index.

Convertible Bonds

Bonds that can be converted into a predetermined number of shares of the issuing company's stock at certain times during the bond's life, usually at the discretion of the bondholder.