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:

Non-controlling Shareholders

Shareholders who own shares in a company but do not have sufficient voting power to influence the company's policies or decisions.

Ownership Interest

The proportion of shares or stake an individual or entity holds in a company, granting them rights and influence over the company.

Group Equity

The collective interest of all shareholders in the total equity of a conglomerate or group of companies under common control.

Ownership Interest

The proportion of an entity owned by a particular investor, reflecting the extent of their legal claim on assets and earnings.