Use the Information Below to Answer the Following Questions -If Revenue Increased by 30%,with No Effect on Expenses Other

question 36

Multiple Choice

Use the information below to answer the following questions. Each question is to be considered separately.
The income statement of Berrima Barbed Wire Ltd is:
$\begin{array}{lr} & \$ \\ \text { Revenue } & 22,000 \\ \text { Expense } & \underline{12,000} \\ \text { Profit before income tax } & 10,000 \\ \text { Income tax expense }(30 \%) & \underline{3,000} \\ \text { Net profit } & \underline{7,000}\end{array}$
-If revenue increased by 30%,with no effect on expenses other than income tax,what would be the effect on net after tax profit?

• A) It would increase by $6600.
• B) It would decrease by $6600.
• C) It would increase by $4620.
• D) It would decrease by $4620.

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Definitions:

Immediate Returns

Earnings or benefits that are received quickly or immediately after an investment or action is made.

Capitalist

An economic system where private individuals own and control property and businesses, operating them for profit.

Competitive Advantage

A condition or circumstance that puts a company in a favorable or superior business position compared to its competitors.

Sustainable Innovation

The creation of new products, processes, or technologies that meet current needs without compromising the ability of future generations to meet their own needs.