Asked by Trevor Hampton on Sep 24, 2024
Verified
You are considering buying a store.The storeowner gives you an estimate of the net profits of the store on a typical day.The owner has most likely given you the figures for the day when
A) Sales are low,costs are high
B) Sales are very close to costs
C) Sales are high,costs are low
D) All of the above
Net Profits
The amount of income that remains after subtracting all expenses, taxes, and costs from total revenue.
Typical Day
A representation of a common or average day in a specific context, often used to illustrate the routine or daily activities of an individual or process.
Sales
The activities involved in selling products or services to customers.
- Show careful consideration when analyzing reported sales and profit figures, recognizing the potential for biases.
Verified Answer
BD
bhanderi Dharmesh5 days ago
Final Answer :
C
Explanation :
When sales are high and costs are low, it is more likely that the store will have a higher net profit. Option A, when sales are low and costs are high, will lead to a low net profit or even losses. Option B, when sales are very close to costs, may result in a small net profit, but it is risky and any small shift in sales or costs will result in losses. Option D is not correct, as not all options lead to high net profits. Thus, option C is the best choice as it aligns with the conditions for high net profit.
Learning Objectives
- Show careful consideration when analyzing reported sales and profit figures, recognizing the potential for biases.