Penny Company Owns 20% Interest in the Stock of Lynn

question 171

Multiple Choice

Penny Company owns 20% interest in the stock of Lynn Corporation. During the year Lynn pays $25000 in dividends and reports $200000 in net income. Penny Company's investment in Lynn will increase by

• A) $25000.
• B) $40000.
• C) $45000.
• D) $35000.

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Definitions:

Budgeted Data

Financial forecasts and plans, including income and expenses, prepared in advance for a specific period.

Tax Rate

The tax rate is the percentage at which an individual or corporation is taxed, influencing the amount of tax owed to the government, varying across income levels and jurisdictions.

Budgeted Break-Even Point

The projected level of sales or production at which total revenues equal total costs, resulting in no profit or loss.

Inpatient Days

A measure of hospital utilisation, representing the total number of days patients spend in the hospital within a given period.