A company's quarterly report shows that despite a 15% increase in gross revenue, its net profit decreased by 5% compared to the previous quarter. Which of the following statements *must* be true given this information?

Question

BrainForge Quiz · Accepted Answer

C) The company's total expenses (Cost of Goods Sold + Operating Expenses) increased by a greater absolute amount than its gross revenue increased.. If revenue increased but profit decreased, it implies that the increase in total expenses (COGS + Operating Expenses) must have exceeded the absolute increase in gross revenue. Otherwise, profit would also have increased.

A company's quarterly report shows that despite a 15% increase in gross revenue, its net profit decreased by 5% compared to the previous quarter. Which of the following statements must be true given this information?

✓ Correct Answer: Option C

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