Question Roulanta Ltd. invests in a project that has the following annual information. Fixed costs are $2000, depreciation is $1000, sales revenue is $11,950 and variable costs are 68.5 percent of revenues.If sales increase by 5 percent, what will be the percentage increase in pretax profits? a. 25 percent b. 5 percent c. 10 percent d. 15 percent e. 20 percent

L2YG05 The Asker · Finance

Roulanta Ltd. invests in a project that has the following annual information. Fixed costs are $2000, depreciation is $1000, sales revenue is $11,950 and variable costs are 68.5 percent of revenues.If sales increase by 5 percent, what will be the percentage increase in pretax profits?

a. 25 percent

b. 5 percent

c. 10 percent

d. 15 percent

e. 20 percent

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Community Answer
EH3PCH

Answer= a. 25 percent Note:    Existing   Revised Sales   Sales Revenue   11,950.00   12,547.50   Less: Variable Cost   8,185.75   8,595.04   Contribution mar ... See the full answer