If Sales and Expenses Both Rise by $100,000,profit Margin Will

question 160

Multiple Choice

If sales and expenses both rise by $100,000,profit margin will

• A)decrease and asset turnover will decrease.
• B)increase and asset turnover will decrease.
• C)decrease and asset turnover will increase.
• D)increase and asset turnover will increase.

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Definitions:

Future Cash Inflows

Projected incoming money to a business from its operations, investments, or financial transactions in the future.

Net Present Value

Net Present Value (NPV) is a financial metric that calculates the present value of the net cash flows from an investment, considering the time value of money.

Salvaging Fixed Assets

The process of recovering value from fixed assets that are no longer usable in their intended capacity, often through sale or recycling.

Discount Rate

Within discounted cash flow analysis, it is the interest rate used to determine the present value of cash flows anticipated in the future.