A Company Reports the Following Amounts at the End of the Year

question 81

Essay

A company reports the following amounts at the end of the year: $\begin{array}{lr}\text { Sales revenue } & \$ 300,000 \\\text { Cost of goods sold } & 225,000 \\\text { Net income } & 50,000\end{array}$ Compute the company's gross profit ratio.

Understand and apply the principles of combinations and permutations to determine the number of possible groups, selections, or orderings.

Understand the concept of sample spaces and how to calculate the number of sample points for various experiments.

Comprehend the foundational concepts of probability, including the calculation of event probabilities, joint, marginal, and conditional probabilities.

Understand and analyze the concept of independent, mutually exclusive, and complementary events and their impact on probability calculations.

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Definitions:

Long-run Total Costs

The total costs incurred by a firm when all factors of production are variable, and the firm can change its scale of operation.

Opportunity Cost

The expense incurred by not choosing the second-best option available during the decision-making process.

Bank Loan

A sum of money borrowed from a bank that must be repaid with interest over a set period.

Diminishing Marginal Product

The principle that as the quantity of a factor of production increases, holding all other inputs constant, the additional output generated by one more unit of that factor will eventually decrease.