If the Estimated Rate of Gross Profit Is 30%, What

question 121

Multiple Choice

If the estimated rate of gross profit is 30%, what is the estimated cost of the merchandise inventory on September 30, based on the following data?

• A) $320,000
• B) $192,500
• C) $275,000
• D) $105,000

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Definitions:

Return On Investment

A measure used to evaluate the efficiency of an investment or compare the efficiencies of several different investments.

Residual Income

The amount of income that an entity has after all costs and expenses, including the cost of capital, have been deducted.

Return On Investment

A measure of the profitability of an investment, calculated by dividing the gain from the investment by the cost of the investment.

Combined Margin

A metric that combines multiple types of profit margins (such as gross, operating, or net margin) to assess overall performance.