You Are to Prepare a Projected Income Statement for a Proposed

question 112

Multiple Choice

You are to prepare a projected income statement for a proposed business venture. Your desired income is $28,000 and you have the following published statistics: Costs of goods sold = 56.9 percent of net sales
Operating expenses = 37.1 percent of net sales
Gross profit margin = 43.1 percent of net sales
This information indicates the net sales on your pro forma "P & L" (income statement) would be:

• A) $466,667.
• B) $491,228.
• C) $500,000.
• D) None of the above

---

Definitions:

Large-company Stocks

Shares that represent ownership in large, well-established companies typically characterized by a high market capitalization.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values, often used to gauge the risk associated with a certain investment or portfolio.

Probability

A measure of the likelihood of a specific event or outcome occurring, expressed as a number between 0 and 1.

Growth Stock

A stock from a company that is expected to grow at an above-average rate compared to other companies in the market, often characterized by high price-to-earnings ratios.