Frank Company, Which Has Total Assets of $300,000, Has an Opportunity

question 129

Multiple Choice

Frank Company, which has total assets of $300,000, has an opportunity to invest $80,000 in a new project that will generate a return of $16,000 per year. Given this information, if Frank Company uses 15% as a minimum rate of return, how much residual income will result from this project?

• A) $16,000 per year
• B) $12,000 per year
• C) $4,000 per year
• D) $0 per year

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Definitions:

Ideology

A system of ideas and ideals, especially one that forms the basis of economic or political theory and policy.

Dominant Ideology

The prevailing cultural beliefs, values, and norms that tend to support and maintain the current power structure and societal hierarchy.

Marx

Karl Marx, a 19th-century philosopher, economist, and revolutionary socialist whose works on the critique of political economy and class struggle have profoundly influenced socialist thought.

Anomie

Durkheim’s term for a state of normlessness that results from a lack of clear goals and may ultimately result in higher suicide rates.