Question

management accounting math quiz
question 10 of 10: sales are going up by 5% over the last three years and expenses declining 5% over the same time period. what is
happening to net income during this time period?
a) going up
b) going down
c) staying the same
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Explanation:

Net income is calculated as Sales - Expenses. If sales are increasing (by 5%) and expenses are decreasing (by 5%), both changes contribute to a higher net income. So net income should be going up.

Answer:

a) Going up