Eagle Company Has a Sales Margin of 15%,a Target Rate

question 25

Multiple Choice

Eagle Company has a sales margin of 15%,a target rate of return of 14%,and capital turnover of 2.5.Its operating income is $87,000.The sales in dollars for Eagle Company may be closest to

• A)$580,000.
• B)$34,800.
• C)$13,050.
• D)$217,500.

---

Definitions:

Marginal Product

The increase in output that arises from an additional unit of input, holding all other inputs constant.

Profit-Maximizing Firm

A business entity's objective of adjusting production and sales to achieve the highest possible profit levels.

Wage Rate

The amount of money a worker is paid per unit of time, such as an hour or a month.

Marginal Cost

The cost related to the production of an additional unit of a product or service.