Please Refer to the Following Data Which of the Following Statements Is a Valid Conclusion Based

question 72

Multiple Choice

Please refer to the following data: $\begin{array}{|l|r|r|r|r|}\hline \text { (Dollar amounts in millions) } & 2014 & & 2013 & \\\hline & \text { Amount } & \text { \% of Total } & \text { Amount } & \text { \% of Total } \\\hline \text { Revenues } & \$ 6,355 & 100.0 \% & \$ 4,920 & 100.0 \% \\\hline \text { Cost of revenues } & 3,370 & 53.0 \% & 2,200 & 44.7 \% \\\hline \text { Gross Profit } & 2,985 & 47.0 \% & 2,720 & 55.3 \% \\\hline \text { Operating expenses: } & & & & \\\hline \text { Sales and marketing expense } & 675 & 10.6 \% & 580 & 11.8 \% \\\hline \text { General and administrative expense } & 410 & 6.5 \% & 425 & 8.6 \% \\\hline \text { Research and development expense } & 470 & 7.4 \% & 390 & 7.9 \% \\\hline \text { Other expense } & 400 & 6.3 \% & 695 & 14.1 \% \\\hline \text { Total operating expenses } & \$ 1,955 & 30.8 \% & \$ 2,090 & 42.5 \% \\\hline & & & & \\\hline \text { Income before income tax } & \$ 1,030 & 16.2 \% & \$ 630 & 12.8 \% \\\hline \text { Income tax expense } & 230 & 3.6 \% & 210 & 4.3 \% \\\hline \text { Net income (loss) } & \$ 800 & 12.6 \% & \$ 420 & 8.5 \% \\\hline\end{array}$
Which of the following statements is a valid conclusion based on this data?

• A) Profitability in 2014 took a dive as operating expenses increased by 30.8%.
• B) Profitability in 2014 improved greatly, as net income increased significantly as a percentage of sales.
• C) Net income in 2014 increased 12.6% over the prior year.
• D) Net income in 2014 went down because gross profit as a percentage of sales declined over the 2-year period.

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Definitions:

Law In Action

The practical application or enforcement of laws in real-life situations, as opposed to theoretical or written legal codes.

Chambliss

Refers to William J. Chambliss, a sociologist known for his work on the sociology of law, criminology, and deviance.

Power Theory

An approach in sociology that examines how power dynamics and inequalities shape societal structures and individual interactions.

Social Inequality

A condition where there's an unequal distribution of resources, opportunities, and privileges among people in a society, often based on class, race, gender, or age.