Table 1-5 Julius Runs a Small Tailor Shop in the in the City

question 294

Multiple Choice

Table 1-5
Julius runs a small tailor shop in the city of Bloomfield. He is debating whether he should extend his hours of operation. Julius figures that his sales revenue will depend on the number of hours the tailor shop is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $18 per hour.
-Refer to Table 1-5. Using marginal analysis, determine how many hours should Julius extend his shop's hours of operations?

• A) 2 hours
• B) 3 hours
• C) 4 hours
• D) 5 hours
• E) 6 hours

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Definitions:

Earnings Per Share

A measurement of a company's profitability, calculated by dividing net income by the number of outstanding shares of its common stock.

Price-Earnings Ratio

A valuation metric for stocks, calculated by dividing the current market price of a share by its earnings per share (EPS).

Dividend Payout Ratio

The ratio of the total dividends declared by a company to its net income, showing what portion of earnings is paid out as dividends.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of the business.