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:

De Facto Annual Report

An implicit report of a company's annual performance, which has become accepted as standard despite not being officially designated as such.

Data Mine

The process of analyzing large sets of data to discover patterns and insights that can inform decision-making.

Percentage Markup

A pricing method where a specific percentage is added to the cost of a product to determine its selling price.

Average Price

Average price is a calculation that sums up the cost of multiple items or services and divides by the number of units to find the mean cost.