LLV Inc Originally Forecasted the Following Financial Data for Next Year

question 8

Multiple Choice

LLV Inc. originally forecasted the following financial data for next year: sales = $1,000, cost of goods sold = $710, and interest expense = $95. The firm believes that COGS will always be 71 percent of sales. Due to pressure from shareholders, the firm wants to achieve a net income of $150. Assuming the interest expense will remain the same, how large must sales be to achieve this goal? Assume a 35 percent tax rate.

• A) $1,403.82
• B) $1,3009.18
• C) $1,123.34
• D) $1,296.51

---

Definitions:

Surface Tension

The property of the surface of a liquid that allows it to resist external forces, due to the cohesive forces between liquid molecules.

Thoracic Compliance

The ability of the thoracic cavity and lungs to stretch and expand during inhalation, influencing the ease of breathing.

Alveolar Surface

The inner surface area of the alveoli, tiny sacs in the lungs where gas exchange between the air and blood takes place.

Type I Pneumocytes

Thin cells that line the alveoli of the lungs and are involved in the process of gas exchange between the lungs and the blood.