Which One of the Following Statements Is Correct Concerning a Corporation

question 15

Multiple Choice

Which one of the following statements is correct concerning a corporation with taxable income of $125,000?

• A) Taxable income minus dividends paid will equal the ending retained earnings for the year.
• B) An increase in depreciation will increase the operating cash flow.
• C) Net income divided by the number of shares outstanding will equal the dividends per share.
• D) Interest paid will be included in both net income and operating cash flow.
• E) An increase in the tax rate will increase both net income and operating cash flow.

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Definitions:

Torque

A gauge of the power capable of making an object spin around a central line.

Driveshaft

A mechanical component used to transmit torque and rotation from the vehicle's engine to the wheels, typically found in rear-wheel and four-wheel drive vehicles.

Transmission

The system in a vehicle that transmits mechanical power from the engine to the drive axle, regulating speed and torque.

Gear Ratios

The ratios of the gear teeth counts between interconnected gears in a transmission, determining how much torque is applied.