A Ratio of Net Income of $100,000 to Sales of $1,000,000

question 108

Multiple Choice

A ratio of net income of $100,000 to sales of $1,000,000 can be stated as

• A)Net income is 1/10,or 10 percent,of sales.
• B)For every dollar of sales,the company has an average net income of 10 cents.
• C)The ratio of sales to net income is 10 to 1 (10:1),or sales are 10 times net income.
• D)All of these choices.

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Definitions:

Investment Project

An undertaking requiring capital investments with the aim of generating future returns.

Interest Rate

is the percentage of a loan amount charged by the lender to the borrower for the use of assets.

Net Present Value

A calculation that compares the present value of a project's cash inflows to its cash outflows, used to assess the viability or profitability of an investment.

Interest Rate

The percentage of a loan that incurs interest costs for the borrower, often stated as an annual rate of the outstanding loan amount.