Use the Information Below to Answer the Following Question(s)

question 174

Multiple Choice

Use the information below to answer the following question(s) .
Akron Laser Wash sells deluxe car washes for $15 per customer. Variable costs are $9 per wash. Fixed costs are $40,000 per month.
-What is Akron Laser Wash's contribution margin per car wash?

• A) $0.40
• B) $9.00
• C) $6.00
• D) $2.50

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Definitions:

Internal Rate

Generally refers to the internal rate of return (IRR), which is a metric used in capital budgeting to estimate the profitability of potential investments.

Cash Flows

The net amount of cash and cash-equivalents being transferred into and out of a business.

Net Present Value

A financial metric used to evaluate the profitability of an investment, representing the difference between the present value of cash inflows and outflows over a period.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the goal of maximizing shareholder wealth.