A Store Applies a 15 Percent Service Charge on All

question 49

Multiple Choice

A store applies a 15 percent service charge on all items with a price of at least $150. No service charge is otherwise applicable. Which of the following DOES NOT correctly compute the service charge?

• A) double serviceCharge = 0;
• If (cost >= 150)
• {
• ServiceCharge = 0.15 * cost;
• }
• B) double serviceCharge = 0.15 * cost;
• If (cost <= 150)
• {
• ServiceCharge = 0;
• }
• C) double serviceCharge;
• If (cost < 150)
• {
• ServiceCharge = 0;
• }
• Else
• {
• ServiceCharge = 0.15 * cost;
• }
• D) double serviceCharge = 15;
• If (cost >= 150)
• {
• ServiceCharge = 0.15 * cost;
• }
• Else
• {
• ServiceCharge = 0;
• }

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Definitions:

Accounting Basis

Refers to the method under which income and expenses are recognized and reported. The two primary methods are cash basis and accrual basis accounting.

NPV

Net Present Value, a calculation that discounts all cash flows associated with a project or investment back to the present value to assess its profitability.

Operating Cash Flow

A measure of the cash generated by a company's normal business operations, reflecting its capacity to sustain and grow operations.

Financial Break-Even

The point at which total revenue exactly covers total costs, leaving no profit or loss.