Assume That Gatsby Enterprises Has Sales of $83 Million and Fixed

question 97

Multiple Choice

Assume that Gatsby Enterprises has sales of $83 million and fixed assets of $22.4 million in 2013. The corporation utilizes the percent-of-sales method of financial forecasting. If Gatsby is expected to generate sales of $94 million in 2014, what will the firm's investment in fixed assets be? The minimum fixed asset expansion costs $4,000,000.

• A) $19.8 million
• B) $26.4 million
• C) $16.2 million
• D) $25.4 million

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Definitions:

Mere Exposure

A psychological phenomenon where people tend to develop a preference for things merely because they are familiar with them.

Mirroring

The behavior in which one person subconsciously imitates the gesture, speech pattern, or attitude of another.

Flattery

The act of giving excessive, often insincere praise, typically to gain favor or advantage.

Group Emotion

The shared affective states experienced by members of a group, influencing collective behavior.