People in Developing Countries May Want to Participate in a Rotating

question 61

Multiple Choice

People in developing countries may want to participate in a rotating savings and credit association (ROSCAS) because:

• A) such associations are part of the black market and they offer attractive returns.
• B) such associations promise a guaranteed return unlike other banking institutions.
• C) such associations allow participating individuals to invest their savings abroad.
• D) such associations allow all but the last member to receive funds faster than they could save on their own.
• E) most governments encourage it.

Calculate the margin of safety in dollars and percentage.

Apply changes in the business environment (e.g., sales incentives, price changes, advertising budget adjustments) to predict their effect on net operating income.

Estimate sales required to achieve a target profit.

Understand the concept of contribution margin ratio and its application in determining target profit sales.