How Is the Margin of Safety Percentage Computed

question 76

Multiple Choice

How is the margin of safety percentage computed?

• A) Break-even sales divided by Total sales.
• B) Total sales minus Break-even sales.
• C) (Total sales - Break-even sales) divided by Break-even sales.
• D) (Total sales - Break-even sales) divided by Total sales.

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Definitions:

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The action or process of obtaining ownership of land, often for business expansion, development, or investment purposes.

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A financial statement detailing the inflows and outflows of cash and cash equivalents, showing how well a company manages its cash position.

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Cash inflows and outflows related to the core business operations of an entity.