Consider a Ponzi Scheme Where Investors Are Promised 100% Profit

question 93

Multiple Choice

Consider a Ponzi scheme where investors are promised 100% profit per quarter and at the beginning of each quarter (90 days) , 1000 investors contribute $1000 each, and all monies stay in
Until the end of the year. Suppose that at the end of the year, 10% of investors actually invest
Another $2000 rather than taking out profit. Now what amount stays with the operator going into
The second year?

• A)$1,200,000
• B)$21,000,000
• C)$4,800,000
• D)$84,000,000

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Definitions:

Perpetual Inventory

A system for managing inventory that instantly logs inventory sales or purchases via computerized point-of-sale systems and software for enterprise asset management.

Freight

The charge paid for transport of goods, typically either by land, sea, or air.

FOB Destination

A shipping term indicating that the sale is considered complete and the goods owned by the buyer upon arrival at the buyer's location.

Credit Memo

A document issued by a seller to a buyer, reducing the amount owed, typically due to a return or refund.