If a Company Has a Positive Contribution Margin but Net

question 64

Multiple Choice

If a company has a positive contribution margin but net operating income is low or negative, what are some ways of increasing net operating income?

• A) Increase sales price
• B) Increase sales volume
• C) Decrease variable costs
• D) All of these are ways to increase net operating income

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Definitions:

Periodic Interest Rate

The interest rate charged or paid over a specific period of time, shorter than a year, such as monthly or quarterly.

Annuity

A financial arrangement designed to supply a consistent stream of payments, usually to assist individuals in maintaining income after retirement.

Payment Interval

The regular schedule at which payments are made, such as monthly or quarterly.

Periodic Interest Rate

The interest rate applied to a loan or investment over a specific period of time, shorter than a year.