Attal Corporation Manufactures Numerous Products,one of Which Is Called Epsilon05

question 110

Multiple Choice

Attal Corporation manufactures numerous products,one of which is called Epsilon05.The company has provided the following data about this product:
Assume that the total traceable fixed expense does not change.If Attal increases the price of Epsilon05 to $75.60,what percentage change in unit sales would provide the same net operating income as is currently being earned at a price of $72.00? (Your answer should be rounded to the nearest 0.1%.)

• A) -11.0%
• B) -10.0%
• C) -19.2%
• D) -9.2%

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Definitions:

Yield-To-Maturity

An estimate of the total return expected on a bond if the bond is held until the date it matures.

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.

Return on Assets

A financial ratio indicating how profitable a company is relative to its total assets, used to assess how efficiently a company uses its assets to generate earnings.

Total Equity

The total net value of a company, calculated as total assets minus total liabilities, representing ownership value in the company.