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Molly's Cupcakes managementistrying to decide whetherto stay in business. They are currently losing money andwantto know how close they are to making a profit and whether they should investin advertising.
Molly's provided the following information: Revenue $34,000? Expense 37,100 Profit(loss) <$3,100>
Managementresponded with the following information:
Management wantsto know how close they are tomaking a profit. Compute the increase in revenue required for Molly'sto break even.
Management has the opportunity to investinmonthly advertising. This advertising is expected to increase sales volume by 25%. What is the most it should be willing to pay for this advertising?
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What is pro forma reporting according to regulation SX of the SEC? How has pro forma reporting been used by corporations over the years? Summarize the arguments for and against this type of reporting.
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