Use the "Percent of Sales Method" of Preparing Pro Forma

question 69

Multiple Choice

Use the "percent of sales method" of preparing pro forma financial statements to determine the projection for next year's accounts receivable.Make the following assumptions: current year's sales are $45,450,000; current year's cost of goods sold is $26,950,000; sales are expected to rise by 20%.The firm's investment in accounts receivable in the current year is $8,600,000.The firm's marginal tax rate is 35%.What is the projection for next year's accounts receivable?

• A) $11,345,000
• B) $10,320,000
• C) $9,575,000
• D) $8,772,000

Understand the relationship between price, marginal cost, and marginal revenue in monopolistically competitive settings.

Analyze the entry and exit dynamics in monopolistically competitive markets and their impact on firms' economic profits.

Interpret and analyze profit and loss situations from graphical representations in the context of monopolistic competition.

Understand the concept of monopolistic competition and how it differs from perfect competition.

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