Based on averages, which of the following businesses is likely to have the highest costs as a percent of sales?
A. manufacturers' agent for textile producers
B. general merchandise wholesaler based in the U.S.
C. export agent for American-made furniture
D. broker for industrial machinery
E. import agent for specialty items from China
Answer: B
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A separate account for each type of material is kept in a subsidiary ledger called a
a. stores ledger; b. products ledger; c. contribution ledger; d. suppliers ledger; e. none of these.
What is the effect of the exercise of stock options?
a. They generate cash to the issuing firm and therefore increase profit per share. b. They are an expense at the time of exercise. This lowers net income. c. They increase debt and lower borrowing capacity but have no effect on profit. d. They increase the number of shares outstanding. e. They have no immediate effect on profitability.
A good starting point for any pricing method is to develop a price based on the cost of producing the good or service
Indicate whether the statement is true or false
Sanford, Inc, enters into a call option contract with Sons Investment Co on January 2, 2014 . This contract gives Sanford the option to purchase 1,000 shares of MAX stock at $100 per share. The option expires on April 30, 2014 . MAX shares are trading at $100 per share on January 2, 2014, at which time Sanford pays $400 for the call option. The $400 paid by Sanford, Inc, to Sons Investment is
referred to as the a. option premium. b. notional amount. c. strike price. d. intrinsic value.