At Age 40, Joe Is Considering Quitting His Job and Going

question 42

Multiple Choice

At age 40, Joe is considering quitting his job and going back for a college degree. He needs two more years full-time. Tuition is $10,000 per year. He earns $30,000 per year. A college degree would raise his annual income by $10,000 per year. He will retire at age 70. From an investment standpoint, Joe will go back full-time if

• A)10,000 × = 40,000 × .
• B)10,000/r > 10,000 × .
• C)10,000 × > 40,000 × .
• D)10,000 × > 40,000 × .

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Definitions:

Gross Accounts Receivable

The total amount owed to a company by its customers for goods or services delivered on credit before any deductions for returns or bad debts.

Bad Debts Expense

The cost associated with accounts receivable that are not expected to be collected.

Contra Asset

An asset account where its balance is opposite of the normal balance, used to offset the balance of a related account, such as allowance for doubtful accounts offsetting accounts receivable.

Expense

An outflow of money to another person or company to pay for an item or service, or for a cost required to operate a business.