Bell Brothers Has $3,000,000 in Sales

question 21

Multiple Choice

Bell Brothers has $3,000,000 in sales.Fixed costs are estimated to be $100,000 and variable costs are equal to 50% of sales.The company has $1,000,000 in debt outstanding at a before-tax cost of 13.5%.If Bell Brothers' sales were to increase by 20%,how much of a percentage increase would you expect in the company's net income?

• A) 19.68%
• B) 23.72%
• C) 27.98%
• D) 19.45%
• E) 21.34%

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