The Following Is a Summary of the Increases in the Account

question 58

Multiple Choice

The following is a summary of the increases in the account categories of the balance sheet of Riley Company for the most recent fiscal year:

The only change to retained earnings during the fiscal year was for $20,000 of dividends. What was the company's net income for the fiscal year?

• A) $25,000
• B) $15,000
• C) $5,000
• D) $20,000

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Definitions:

Independent Projects

Projects within a financial or business context that do not affect each other's outcomes or viability.

Multiple IRR Projects

Investment projects that, due to their cash flow structure, yield more than one internal rate of return, complicating the investment decision.

Discounted Cash Flow

A valuation method used to estimate the attractiveness of an investment opportunity, by calculating the present value of expected future cash flows.

Discounted Payback

A capital budgeting method that calculates the amount of time needed to recoup an investment based on its discounted cash flows.