Question: Your company wants to expand and it will cost $100,00. Your current sales are $1 million and your sales growth is 12%. If you expect no increase in expenses, can you expand next year? a) No, your increase in sales will not cover the expense. b) No, your expansion costs will go up. c) Yes, your increase in sales will cover the expense. d) Yes, your expansion costs will go down.
Question: Your company wants to expand and it will cost $100,00. Your current sales are $1 million and your sales growth is 12%. If you expect no increase in expenses, can you expand next year? a) No, your increase in sales will not cover the expense. b) No, your expansion costs will go up. c) Yes, your increase in sales will cover the expense. d) Yes, your expansion costs will go down.
Chapter4A: Nopat Breakeven: Revenues Needed To Cover Total Operating Costs
Section: Chapter Questions
Problem 1EP
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Transcribed Image Text:Question:
Your company wants to expand and it will cost $100,00.
Your current sales are $1 million and your sales growth is
12%. If you expect no increase in expenses, can you
expand next year?
a) No, your increase in sales will not cover the expense.
b) No, your expansion costs will go up.
c) Yes, your increase in sales will cover the expense.
d) Yes, your expansion costs will go down.
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