Ramos Company
Ramos Company Included the Following Information in Its

question 95

Multiple Choice

Ramos Company
Ramos Company included the following information in its annual report:
$\begin{array}{|l|r|r|r}\hline & \mathbf{2 0 1 1} & \mathbf{2 0 1 0} & {\mathbf{2 0 0 9}} \\\hline \text { Sales } & \$ 178,400 & \$ 162,500 & \$ 155,500 \\\hline \text { Cost of goods sold } & 115,000 & 102,500 & 100,000 \\\hline \text { Operating expenses } & 50,000 & 50,000 & 45,000 \\\hline \text { Net income } & 13,400 & 10,000 & 10,500 \\\hline\end{array}$

-Refer to the information for Ramos Company.In a percentage change income statement over the period of 2009 to 2011,what is the change in net income? 

• A) 100%
• B) 21.6%
• C) 72.4%
• D) 27.6%

---

Definitions:

Golden Parachutes

Contractual agreements that provide senior executives with significant benefits in the event that they are terminated as a result of a merger or takeover.

Discount Rate

The interest rate used to discount future cash flows to their present values, reflecting the time value of money and risk.

Acquisition

The process by which one company takes over another and clearly establishes itself as the new owner.

Free Cash Flow

Cash generated by a business above that needed for asset replacement and growth.