John Owen owns a drugstore that is experiencing significant growth. Owen is trying to decide whether to expand its capacity, which currently is $200,000 in sales per quarter. Sales are seasonal
Forecasts of capacity requirements, expressed in sales per quarter for the next year, follow.
Quarter ($000 )
1 240
2 180
3 220
4 260
Owen is considering expanding capacity to the $250,000 level in sales per quarter. The before-tax profit margin from additional sales is 15 percent. How much would before-tax profits increase next year because of this expansion?
A) less than $15,000
B) more than $15,000 but less than $16,000
C) more than $16,000 but less than $17,000
D) more than $17,000
C
You might also like to view...
Which of the following statements is not correct?
a. the voucher system is used to improve control over cash disbursements b. the sum of the paid vouchers represents the voucher payable liability of the firm c. the voucher system permits the firm to consolidate payments of several invoices on one voucher d. many firms replace accounts payable with a voucher payable system
Use the earned value table to determine the estimated time to completion given the indicated state of the project
Activity 5 10 15 20 25 30 35 Plan % Complete A 850 350 1,200 100% B 400 125 525 100% C 1,275 650 1,925 100% D 2800 4,500 350 7,650 95% E 680 400 1,080 75% F 125 875 1,000 80% G 300 1200 1,500 45% Monthly Plan 850 750 1,400 3,450 5,180 1,175 2,075 14,880 Monthly Act 900 650 1,350 3,875 4,780 850 2,000 A) 35 days B) 37 days C) 39 weeks D) 41 weeks
Through diversification it is possible to eliminate all of the company-specific risk inherent in owning stocks. However, as a general rule it will not be possible to eliminate systematic (market) risk
Indicate whether the statement is true or false
Desk checking is a testing technique in which the program code is sequentially executed manually by the reviewer
Indicate whether the statement is true or false