Jada Left a Job That Paid $40,000 Per Year

question 94

Multiple Choice

Jada left a job that paid $40,000 per year. At the end of her first year in business, her revenues summed to $90,000, and her explicit costs were $50,000. Also, in order to fund her business startup, Jada cashed in a $20,000 certificate of deposit that was providing an annual yield of 5%. Ceteris paribus, Jada's accounting profit is

• A) $40,000.
• B) $1,000.
• C) -$1,000.
• D) $0.

Analyze the impact of changing attitudes and roles of men and women in society.

Comprehend the importance of multicultural marketing in a diverse society.

Define and differentiate between disposable, discretionary, and gross income.

Appreciate the cultural value of social action and its impact on business practices.

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Definitions:

Retaining Earnings

Retained earnings refer to the portion of net income that is kept by a company rather than being paid out to its shareholders as dividends.

External Equity

Funds raised from outside investors, including public offerings, private placements, and venture capital.

Flotation Costs

The costs associated with issuing new securities, including underwriting, legal, and registration fees, which affect the net proceeds of the issued securities.

Market Risk Premium

The Market Risk Premium refers to the additional return an investor expects from holding a risky market portfolio instead of risk-free assets. It represents the compensation investors demand for taking on higher risk.