A Forecast Using a Percentage of Sales Model Expects Sales

question 47

Multiple Choice

A forecast using a percentage of sales model expects sales to increase by 20% over the next four years.If costs are proportional to sales at 80%, and last year's sales were $1,000, the net income in the fourth year will be:

• A)$48.62
• B)$145.86
• C)$227.60
• D)$243.10

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Definitions:

Ideation

The creative process of generating, developing, and communicating new ideas, whether abstract or concrete.

Business Travel

The act of traveling for work or professional purposes, often involving trips to different cities or countries to attend meetings, conferences, or conduct business operations.

Relationships

Connections or associations between individuals based on emotional bonds, interactions, or mutual dealings.

Tax Deductible

Expenses that can be subtracted from one's gross income, reducing taxable income and the amount of tax owed.