Final answer:
The Net Profit Ratio for White is calculated by subtracting the total expenses from the total revenues, resulting in a negative Net Profit of -$4,000. This is then divided by the total revenues of $78,000 and multiplied by 100%, leading to a Net Profit Ratio of -5.13%, which indicates a loss.
Step-by-step explanation:
To calculate the Net Profit Ratio, we need to consider the total revenues and total expenses of a business. In the provided case, White received a total of $78,000 in progress payments for the year which we consider as revenues, and the total expenses amounted to $82,000. Using the formula for Net Profit Ratio:
Net Profit Ratio = (Net Profit / Total Revenues) × 100%
Net Profit is calculated by subtracting Total Expenses from Total Revenues. Hence, the calculation will be:
Net Profit = $78,000 (Total Revenues) - $82,000 (Total Expenses) = -$4,000
Now, we plug the values into the formula:
Net Profit Ratio = (-$4,000 / $78,000) × 100%
Net Profit Ratio = -5.13%
Therefore, the correct answer is c.(-5.13%), indicating a negative Net Profit Ratio, which means that White is facing a loss rather than making a profit.