Question
1. If the contribution margin ratio for ABC Co. is 20%, the variable cost ratio was 80%, sales were $2,000,000 and fixed costs were $100,000,
1. If the contribution margin ratio for ABC Co. is 20%, the variable cost ratio was 80%, sales were $2,000,000 and fixed costs were $100,000, what was income from operations? a) $300,000 b) $1,500,000 c) $400,000 d) $1,600,000
2. A proposed capital project would costs $500,000. It is expected to have a useful life of 8 years, with no salvage value. The estimated income over the lifetime of the project is $250,000. What is the expected average rate of return for the project? a) 50% b) 12.5% c) 6.3% d) 10.5%
3. What is the present value of a single sum of $5,000 to be received in 10 years, assuming 12% interest? a) $1,610 b) $885 c) $4,464 d) $5,600
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