Presently,the Software Division of Bennett Publishing Corporation has a profit margin of 30%.If total sales rise by $100,000,the net result will be
A)an increase in the profit margin ratio to above 30%.
B)a decrease in the profit margin ratio to below 30%.
C)no change in the profit margin ratio.
D)a change in the profit margin ratio that cannot be determined from this information.

Question

Quizplus · Accepted Answer

Since the problem only gives us information about a change in sales and no information about changes in expenses or profits, we can assume that the profit margin ratio will stay the same. Therefore, there will be no change in the profit margin ratio.

Presently,the Software Division of Bennett Publishing Corporation Has a Profit