How Does Seasonality Create Fluctuations in a Firm's Net Income

question 45

Multiple Choice

How does seasonality create fluctuations in a firm's net income over a year?

• A) Cost of goods sold will rise and fall along with sales, while administrative and other costs will remain relatively steady.
• B) Cost of goods sold will rise when sales fall, and vice versa, while administrative and other costs will remain relatively steady.
• C) Cost of goods sold, along with administrative and other costs, will rise when sales fall, and vice versa.
• D) Cost of goods sold, along with administrative and other costs, will rise and fall along with sales.

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Definitions:

Ethyl

A two-carbon alkyl functional group derived from ethane, commonly found in many organic compounds.

Primary Alkane

Alkanes where the carbon atoms are connected in a straight chain without any branches.

Gasoline

A volatile, flammable liquid made from crude oil or petroleum, used primarily as fuel in internal combustion engines.

Branched Alkane

Hydrocarbons featuring a tree-like structure, where carbon chains deviate from a straight chain due to side chains.