If a Company Increases Its Sales Price by $5 and Its

question 51

Multiple Choice

If a company increases its sales price by $5 and its variable costs per

• A)the total contribution margin will decrease.
• B)the contribution margin per unit will decrease.
• C)the contribution margin per unit will increase.
• D)the contribution margin per

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Definitions:

Financial Leverage

Utilizing borrowed money to enhance the possible gains from an investment.

Tax Rate

The proportion of tax that an individual or business must pay on their earnings.

ROE

Return on Equity; a measure of the profitability of a business in relation to the equity, calculated as net income divided by shareholder equity.

Assets

Resources owned by a company that have economic value and can be converted into cash, including but not limited to property, plant, equipment, and intellectual property.