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McComb Inc

question 100

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McComb Inc. earns $900,000 and pays cash dividends for $300,000 during 2014. SFX Corporation owns 70,000 of the 210,000 outstanding shares of McComb. What amount should SFX show in the investment account at December 31, 2014 if the beginning of the year balance in the account was $100,000?

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Definitions:

Pooled Variance

A method to estimate the variance of two or more populations that assumes the populations have the same variance but different means.

Test Statistic

A value calculated from sample data during a hypothesis test that is used to determine the probability of observing the sampled data under the null hypothesis.

Population Variances

A measure of the dispersion or spread of a set of data points in a population; it quantifies how much the data points deviate from the mean of the population.

Confidence Interval

A range of values, derived from sample statistics, that is believed to contain the true population parameter with a certain level of confidence.

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