If a Company Has a Discontinued Operation Gain of $30,000

question 128

Multiple Choice

If a company has a discontinued operation gain of $30,000 and a 32% tax rate, what is the effect on net income?

• A)Increase of $30,000.
• B)Increase of $20,400.
• C)Increase of $9,600.
• D)No effect.

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Definitions:

Gambler's Fallacy

A logical fallacy in which one assumes that future probabilities are altered by past events, often seen in gambling when assuming a certain outcome is "due".

Sunk Cost Fallacy

The misconception of valuing a project or investment based on the amount of resources already invested, rather than the prospective future returns.

Argumentum Ad Hominem

A logical fallacy that occurs when an argument is rebutted by attacking the character, motive, or other attribute of the person making the argument, rather than addressing the substance of the argument itself.

Gambler's Fallacy

The erroneous belief that if an event happens more frequently than normal during a past period, it will happen less frequently in the future, or vice versa.