Applying the Interest Allowance Method,compute Taylor and Timmy's Share of Net

question 114

Multiple Choice

Applying the interest allowance method,compute Taylor and Timmy's share of net income if Taylor invested $300,000 and Timmy invested $700,000 at a 6% interest rate,with the remainder to be divided equally.Net income was $80,000.

• A)Taylor,$24,000;Timmy,$56,000
• B)Taylor,$40,000 Timmy,$40,000
• C)Taylor,$28,000;Timmy,$52,000
• D)None of these answers is correct.

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Definitions:

Canalized Characteristic

A trait that is genetically determined and less influenced by environmental factors, showing little variation among individuals.

Environmental Variations

Differences in environmental conditions that can affect organisms and lead to differing characteristics among them.

Family Study

A study that compares members of the same family to determine how similar they are on a given trait.

Cousins

Relatives who share a common ancestor other than a parent; typically, the children of one's aunt or uncle.