A Firm Has Year End 2001 and 2002 Retained Earnings

question 142

Multiple Choice

A firm has year end 2001 and 2002 retained earnings balances of $670,000 and $560,000, respectively. The firm reported net profits after taxes of $100,000 in 2002. The firm paid dividends in 2002 of__________ .

• A) $210,000
• B) $110,000
• C) $100,000
• D) $10,000

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Definitions:

Investment Projects

Initiatives or activities undertaken to allocate resources in the expectation of future benefits or returns.

Loanable Funds

The total supply of money available for borrowing or spending in the economy, including savings and investments.

Medicare

A federal health insurance program in the United States for people aged 65 and older, and for some younger people with disabilities.

Loanable Funds

The funds available for borrowing in the financial markets, determined by the savings of households and institutions.