Use the Table for the Question(s)below

question 98

Multiple Choice

Use the table for the question(s) below.
Income Statement for Xenon Manufacturing:

-Consider the above Income Statement for Xenon Manufacturing.All values are in millions of dollars.Calculate the gross margin for 2014 and 2015.What does the change in the gross margin between these two years imply about the company?

• A)The efficiency of Xenon Manufacturing has significantly risen between 2014 and 2015.
• B)The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them rose between 2014 and 2015.
• C)The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them fell between 2014 and 2015.
• D)The leverage of Xenon Manufacturing fell slightly between 2014 and 2015.
• E)The revenues available to equity holders fell slightly between 2014 and 2015.

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Definitions:

Nonexcludable

Describes a good or service for which it is not possible to prevent people who have not paid from consuming or using it, such as public parks or street lighting.

Efficiency

The optimal allocation of resources to maximize the desired outputs while minimizing waste or unnecessary effort.

Nationally Franchised

Businesses that operate under a licensing agreement allowing them to sell products or services under a national company's brand and operational model.

Uninformed Consumers

Consumers lacking sufficient information about products or services to make knowledgeable decisions.