Use the Table for the Question(s)below

question 98

Multiple Choice

Use the table for the question(s) below.
Income Statement for Xenon Manufacturing:

-Consider the above Income Statement for Xenon Manufacturing.All values are in millions of dollars.Calculate the gross margin for 2014 and 2015.What does the change in the gross margin between these two years imply about the company?

• A)The efficiency of Xenon Manufacturing has significantly risen between 2014 and 2015.
• B)The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them rose between 2014 and 2015.
• C)The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them fell between 2014 and 2015.
• D)The leverage of Xenon Manufacturing fell slightly between 2014 and 2015.
• E)The revenues available to equity holders fell slightly between 2014 and 2015.

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Definitions:

GDP

GDP stands for Gross Domestic Product, which is an indicator of a nation's economic health, calculated by adding up the value of every good and service produced for a certain period.

Multiplier

A factor that quantifies the additional economic impact of spending; it measures by how much a change in investment or government spending will affect the total economic output.

MPC (Marginal Propensity To Consume)

The proportion of additional income that an individual consumes rather than saving.

MPC (Marginal Propensity To Consume)

The ratio of the change in consumption to the change in income, indicating how income changes affect spending.