Olde Tyme Beverage Company's Operating Activities for the Year Are

question 121

Multiple Choice

Olde Tyme Beverage Company's operating activities for the year are listed below. $$\begin{array} { | l | r | } \hline \text { Purcheses } & \$ 132,000 \\\hline \text { Operating expenses } & 80,000 \\\hline \text { Bepinging inventory } & 12,000 \\\hline \text { Ending inventory } & 16,000 \\\hline \text { Sales revenue } & 275,000 \\\hline\end{array}$$
-What is the cost of goods sold for the year?

• A)$144,000
• B)$132,000
• C)$128,000
• D)$ 63,000

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Definitions:

M&M Proposition II

A theory in corporate finance that suggests the cost of equity increases with higher debt levels, keeping the company's value unchanged if taxes are not considered.

Financial Risk

The hazard of suffering financial loss through an investment or business endeavor.

Business Risk

encompasses the potential for a firm's operational or financial performance to suffer due to internal or external factors, impacting profitability and viability.

Absolute Priority Rule

A principle in bankruptcy proceedings that senior creditors are paid before junior creditors and equity holders.