Calculating the Margin of Safety (MOS) Measure Will Help a Firm

question 82

Multiple Choice

Calculating the margin of safety (MOS) measure will help a firm answer which of the following questions?

• A) Will we break even?
• B) Are we using our debt wisely?
• C) How much will profits change if sales change?
• D) How much profit will we earn?
• E) How much revenue can we lose before we drop below the breakeven point?

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Definitions:

Consecutive Odd Integers

A sequence of odd numbers where each number is two more than the previous one.

Product

The result of multiplying two or more numbers together.

Inequality

A relation that holds between two values when they are different, represented by symbols that show if one value is less than, greater than, or not equal to another value.

Real Number Line

A line that represents all real numbers in a continuous sequence, with positive numbers to the right of zero and negative numbers to the left.