What Does the Contribution Margin Measure

question 89

Multiple Choice

What does the contribution margin measure?

• A)The amount that can be contributed to bond repayment
• B)The incremental change in revenue from an additional unit sold
• C)The amount available to pay fixed costs and contribute to profits
• D)The incremental change in revenue from an additional dollar spent on advertising

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Definitions:

Canada Call Feature

A special feature on certain bonds that allows the issuer to redeem the bond before maturity in the Canadian market.

Maturity

Maturity indicates the date on which the principal amount of a financial instrument is due to be paid back.

Buyback Price

Buyback price is the price at which a company agrees to repurchase its own shares from shareholders, often as part of a share repurchase program.

Quality Ratings

Assessments of the creditworthiness or quality of corporations and government bonds, often provided by credit rating agencies.