What Is the Cost of Sales for a Firm with a Gross

question 45

Multiple Choice

What is the cost of sales for a firm with a gross margin of 30 percent, ROS of 4 percent, and earnings after taxes of $20,000?

• A) $200,000
• B) $350,000
• C) $150,000
• D) None of the above

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Definitions:

Cost

The amount of money required to purchase goods or services or the value consumed in the production of goods or services.

Discount Rate

The rate of interest applied to loans provided to commercial banks and other financial institutions by the Federal Reserve through its discount window.

Compounded Annually

Interest calculation method where interest is added to the principal sum at the end of each year, and the subsequent interest calculation includes the previously accumulated interest.