Refer to the Information Provided in Figure 17

question 78

Multiple Choice

Refer to the information provided in Figure 17.1 below to answer the question(s) that follow. Figure 17.1
-Refer to Figure 17.1. Dmitri has two job offers when he graduates from college. Dmitri views the offers as identical, except for the salary terms. The first offer is at a fixed annual salary of $40,000. The second offer is at a fixed salary of $20,000 plus a possible bonus of $40,000. Dmitri believes that he has a 50-50 chance of earning the bonus. Dmitri's expected value from the first job offer is ________ and is ________ from the second job offer.

• A) $40,000; $60,000
• B) $40,000; $40,000
• C) $40,000; $50,000
• D) $20,000; $40,000

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Definitions:

Accounting Period

A specific period of time covered by accounting records and financial statements, typically a year or a quarter.

Dividends Account

An account in the general ledger that records payouts to shareholders from the company's earnings.

Permanent Account

An account that is not closed at the end of the accounting period and carries its ending balance into the next period, typically including assets, liabilities, and equity accounts.

Dividends Account

An account in the general ledger that records the amount of dividends declared by a company to be paid to shareholders.