-Refer to the Following Selected Financial Information from Shakley's Incorporated

question 93

Multiple Choice

$$\begin{array} { | l | r | r | } \hline &{ \text { Year 2 } } & \text { Year 1 } \\\hline \text { Net sales } & \$ 478,500 & \$ 426,250 \\\hline \text { Cost of goods sold } & 276,300 & 250,120 \\\hline \text { Interest expense } & 9,700 & 10,700 \\\hline \text { Net income before tax } & 67,250 & 52,680 \\\hline \text { Net income after tax } & 46,050 & 39,900 \\\hline \text { Total assets } & 317,100 & 288,000 \\\hline \text { Total liabilities } & 181,400 & 167,300 \\\hline \text { Total equity } & 135,700 & 120,700 \\\hline\end{array}$$
-Refer to the following selected financial information from Shakley's Incorporated.Compute the company's profit margin for Year 2.

• A) 14.1%.
• B) 11.7%.
• C) 9.6%.
• D) 16.7%.
• E) 33.9%.

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Definitions:

Marginal Revenue

The revenue increase from the sale of an additional unit of a good or service.

Marginal Cost

The additional cost incurred by producing one more unit of a product.

Raise Price

An action taken by a seller to increase the selling price of a product or service, often in response to higher costs or in an attempt to increase profits.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the excess that remains after a firm has paid all costs.