________ measures the percentage of sales revenue a firm is able to retain after all expenses are deducted from gross revenues.

1 answer:

8 0

Net Profit Margin measures the percentage of sales revenue a firm is able to retain after all expenses are deducted from gross revenues.

What is Net Profit Margin?

A financial measure called net profit margin can be used to determine what much of a company's total revenue is profit. It gauges how much net profit a business makes for every dollar of revenue generated. The ratio of net profit to total sales, stated as a percentage, is known as the net profit margin.

Net profit is determined by subtracting all business costs from net income. A percentage is the outcome of the profit margin computation; for instance, a 10% profit margin indicates that for every $1 in revenue, the company makes $0.10 in net profit. Revenue represents the entire sales of the company in a period.

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c. All are correct.

Explanation:

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Amortizing a loan P over n periods at i% interest / period, the payment per period is given by:
$A= P(i(1+i)^n)/((1+i)^n-1)$

In given situation,
P=20000
period=month
i=10%/12
n=5*12=60 months

A. monthly payment amount
$A= P(i(1+i)^n)/((1+i)^n-1)$
$= 20000(.1/12(1+.1/12)^60)/((1+.1/12)^60-1)$
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B. EAR (effective annual rate)
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Answer:

Contribution margin ratio = 1 - variable cost ratio

= 25%

(a) $Break\ even\ in\ dollars=\frac{fixed\ costs}{contribution\ margin}$