The Law Firm of Regal and Porter Is Examining Its

question 100

Multiple Choice

The law firm of Regal and Porter is examining its client base to determine how profitable its regular clients are.Its analysis indicates that Hawthorne,Inc.paid $179,200 in fees last year,but cost the firm $208,600 ($168,000 in billable labor,supplies,and copying,and $40,600 in allocated common fixed costs) .If Regal and Porter dropped Hawthorne,Inc.as a client,and all fixed costs are unavoidable,how would profit be affected?

• A)$0
• B)Increase $29,400
• C)Decrease $11,200
• D)Decrease $179,200

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, usually with predetermined dividend payments.

Dividend Per Share

The amount of dividend that a company pays out for each share of its stock.

Rate Of Return

Accumulation or reduction in the investment value over a chosen interval, denoted as a percentage of the investment's root cost.