Which one of the following will increase the profit margin of a firm? a. decreas

Question

Which one of the following will increase the profit margin of a firm? a. decreasing the tax rate b. increasing the cost of goods sold c. increasing the fixed costs d. increasing the interest paid e. increasing the depreciation expense 0.5 points   

Which one of the following will increase the profit margin of a firm? a. decreasing the tax rate b. increasing the cost of goods sold c. increasing the fixed costs d. increasing the interest paid e. increasing the depreciation expense 0.5 points   

Which one of the following will increase the profit margin of a firm? a. decreasing the tax rate b. increasing the cost of goods sold c. increasing the fixed costs d. increasing the interest paid e. increasing the depreciation expense 0.5 points   

Explanation / Answer

Decreasing the tax rate will increase the profit margin of a firm .

Rest all i.e Cost of Goods sold , increase in fixed cost , increasing the interest paid and increasing the depreciation expensse would result in decrease in the profit .All this are deducted from revenue to get the profit margin and increasing these are result in decrease profit and vice versa.So decrease in tax rate will increase the profit margin .

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