The Price Index Was 150 in the First Year,142

question 101

Multiple Choice

The price index was 150 in the first year,142.5 in the second year,and 138.2 in the third year.The economy experienced

• A)5.0 percent deflation between the first and second years,and 3.0 percent deflation between the second and third years.
• B)7.5 percent deflation between the first and second years,and 4.3 percent deflation between the second and third years.
• C)5.3 percent inflation between the first and second years,and 4.1 percent inflation between the second and third years.
• D)7.5 percent inflation between the first and second years,and 4.3 percent inflation between the second and third years.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted; it contributes towards covering fixed costs and generating profit.

Gross Margin Percentage

A financial metric that represents the percentage difference between sales revenue and the cost of goods sold, divided by sales revenue, showcasing the efficiency of a company in managing its production costs.

Times Interest Earned Ratio

A metric used to measure a company's ability to meet its debt obligations, calculated as earnings before interest and taxes divided by interest expense.

Net Income

The total profit of a company after all expenses, including taxes, have been deducted from revenue.