This Question Is to Be Considered Independently of All Other

question 46

Multiple Choice

This question is to be considered independently of all other questions relating to Laro Corporation. Refer to the original data when answering this question. The marketing manager would like to cut the selling price by $13 and increase the advertising budget by $17,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 1,200 units. What should be the overall effect on the company's monthly net operating income of this change?

• A)decrease of $57,400
• B)decrease of $7,600
• C)increase of $57,400
• D)increase of $147,400

---

Definitions:

Earnings Process

The series of steps undertaken by a company to report income from its operations, culminating in the publication of financial statements.

Net Asset Value

Net Asset Value (NAV) is the total value of a fund's assets minus its liabilities, often used to price shares of mutual funds and ETFs.

Net Asset Valuation

A method of valuing a company or an investment fund, calculated by subtracting total liabilities from total assets.

Net Income Determination

The process of calculating a company's total earnings after subtracting all expenses, including taxes and costs, from total revenues.