Multiple Choice
Which of the following is a simplifying assumption commonly made in net present value (NPV) analysis?
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4. Merchandising Operations
Net Sales
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A company has net sales of \$695,000 and cost of goods sold of \$278,000. What is its gross profit?
A
\$973,000
B
\$417,000
C
\$695,000
D
\$278,000
Verified step by step guidance1
Understand the formula for Gross Profit: Gross Profit = Net Sales - Cost of Goods Sold.
Identify the given values in the problem: Net Sales = $695,000 and Cost of Goods Sold = $278,000.
Substitute the given values into the formula: Gross Profit = $695,000 - $278,000.
Perform the subtraction operation to calculate the Gross Profit.
Interpret the result as the company's Gross Profit, which represents the profit earned after deducting the cost of goods sold from net sales.
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