If Total Liabilities Decreased by $105,000 and Stockholders' Equity Decreased

question 80

Multiple Choice

If total liabilities decreased by $105,000 and stockholders' equity decreased by $35,000 during a period of time, then total assets must change by what amount and direction during that same period?

• A)$140,000 increase
• B)$70,000 decrease.
• C)$140,000 decrease.
• D)$70,000 decrease

Understand the concept and calculation of the accounting rate of return for investment assessment.

Apply knowledge of various capital budgeting evaluation methods including payback period, net present value (NPV), internal rate of return (IRR), and profitability index.

Calculate and interpret the payback period for capital investments.

Determine the net present value (NPV) of an investment and understand its implications for project selection.

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Definitions:

Commodity Money

Anything that serves both as money and as a commodity; money that has intrinsic value such as gold or silver coins.

Double Coincidence

A situation in a barter system where two parties each hold an item the other wants, necessitating an exact match to complete an exchange.

Trade

The exchange of goods, services, or both between countries or individuals, allowing for the specialization and efficiency benefits.

Relative Values

A measure of the worth or importance of one thing in comparison to another, often used in economics to compare the value of different commodities or services.