If Investor Company Owns 20% of the Stock of Investee

question 20

Multiple Choice

If Investor Company owns 20% of the stock of Investee Company and Investee Company reports profits of $100,000,then Investor Company reports equity income of:

• A)$80,000.
• B)$20,000.
• C)$40,000.
• D)$60,000.
• E)None of the answers are correct.

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Definitions:

Final Goods

Products that have completed the manufacturing process and are ready for use by consumers or to be sold as finished goods.

GDP

The total value of all ultimate goods and services generated within a country during a designated period is known as the Gross Domestic Product.

GDP Deflator

An economic metric that converts output measured at current prices into constant-price output, making it possible to compare the real value of aggregate production across different periods.

Base Year

A reference year used in economic index calculations, price comparisons, and economic data to account for the effects of inflation.