Harvey Quit His Job at the University of Toronto Where

question 69

Multiple Choice

Harvey quit his job at the University of Toronto where he earned $45,000 a year,the same as other employees of normal ability,the same as other employees of normal ability.But Harvey is unusually talented in another area,and he figures his entrepreneurial talent,or forgone entrepreneurial income,to be $5000 a year.He cashed in $100,000 in bonds that earned 10% interest annually to buy a software company,Extreme Gaming.In the first year,the firm sold 11,000 units of software at $75 per unit.Of the $75 per unit,$55 goes for the costs of production,packaging,marketing,employee wages and benefits,and rent on a building.
-Refer to the above information.The accounting profit in the first year was

• A) $50,000.
• B) $70,000.
• C) $150,000.
• D) $220,000.
• E) $250,000.

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation, giving them the right to vote on corporate matters and receive dividends.

Director Serve

The role or term during which an individual serves on a board of directors for an organization or corporation.

Corporate Directors

Individuals elected by shareholders to manage a corporation's affairs and make major decisions.

Articles

Short for "articles of incorporation," which are documents filed with a government body to legally document the creation of a corporation.