A Forecast Using a Percentage of Sales Model Expects Sales

question 48

Multiple Choice

A forecast using a percentage of sales model expects sales to increase by 5% annually over the next 4 years. If all costs are proportional to sales at 80%, and this year's net income is $1,250, the net income in the fourth year will be:

• A) $1,447.03.
• B) $1,826.15.
• C) $1,595.35.
• D)$1,519.38.

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Definitions:

Investment Decisions

Choices made by individuals or entities in allocating resources or capital to opportunities expected to generate returns or growth.

Downsizing

A business strategy involving the reduction of a company's workforce to improve its efficiency and reduce costs.

Countercurrent Exchange

A mechanism by which fluids flowing in opposite directions exchange properties, optimizing heat or mass transfer.

Gas Exchange Efficiency

The effectiveness with which an organism exchanges oxygen and carbon dioxide with its environment, crucial for respiration.