Calculate the net income if the net margin is 75% and expenses incurred is $160,000.
A)$480,000
B)$640,000
C)$360,000
D)$570,000
E)$600,000

Question

Quizplus · Accepted Answer

Net income = Net margin * (Sales - Expenses)Net margin = 75% = 0.75Expenses = $160,000Let Sales be xThen, 0.75 * (x - 160,000) = Net income=> 0.75x - 120,000 = Net income=> Net income = 0.75x - 120,000We don't have the value of Sales, so we cannot calculate the exact value of Net income. However, we can say that Net income will be greater than $120,000.Therefore, the correct answer is A.

Calculate the Net Income If the Net Margin Is 75