Company a Has a Profit Margin on Sales Ratio of 8

question 138

Multiple Choice

Company A has a profit margin on sales ratio of 8% and Company B has a profit margin on sales ratio of 12%.Which of the following must be true?

• A)Company B must charge more for its goods than Company A.
• B)Company B must have a higher gross profit margin than Company A.
• C)Company B's expenses must be less than Company A's.
• D)Company B must make more on each dollar of sales than Company A.

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Definitions:

T-Bill

Short for Treasury Bill, a short-term government security issued at a discount from the face value and maturing at par.

Interest Rates

The percentage of a sum of money charged for its use or paid to investors over a period.

T-Bill

Short for Treasury Bill, a short-term government security issued at a discount from the par value and paying no interest before maturity.

Simple Interest

A method of calculating interest where the calculation is based only on the original amount of money invested or borrowed, excluding the effect of compounding.