Coca-Cola Reported Net Sales Revenues of $18

question 36

Multiple Choice

Coca-Cola reported net sales revenues of $18.8 billion and cost of goods sold of $5.6 billion while PepsiCo reported revenues of $22.3 billion and cost of goods sold of $9.3 billion.Which of the following statements is correct?

• A)While PepsiCo generated more revenues than Coca-Cola,PepsiCo generated a lower gross profit percentage.
• B)Coca-Cola generated a lower gross profit percentage because their sales revenue was lower.
• C)PepsiCo did a better job of controlling product costs as a percentage of sales than did Coca-Cola as shown by their $13.0 billion gross profit.
• D)None of the answers are acceptable.

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Definitions:

Zero-Coupon Bond

A debt security that does not pay periodic interest, instead being sold at a discount and maturing at face value, generating profit at redemption.

Interest Payments

The cash outflows that a borrower makes to a lender as a compensation for the use of borrowed funds.

Premium Bond

A bond that is trading above its par value in the financial markets.

Default Risk Premium

The additional yield that an investor demands for holding a bond with default risk over a similar risk-free security.