Crazy Cryptography Is a Software Corporation That Has 1,000 Shares

question 11

Multiple Choice

Crazy Cryptography is a software corporation that has 1,000 shares of stock in existence.The corporation has just surprised the market by announcing a new software package that will increase the company's after-tax profit by $500,000 each year,forever.If the interest rate is 8 percent (0.08) per year,by how much will the value of a single share of stock increase?

• A)$500.00
• B)$6,250.00
• C)$5,000.00
• D)$10,000.000
• E)$8,333.33

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Definitions:

Gain

A gain refers to an increase in wealth or resources, typically measured in financial terms and often realized from the sale of an asset for more than its cost.

Accounting Rules

The formal guidelines and principles that govern financial accounting practices, ensuring accuracy and consistency in financial reporting.

Gains Incurred

Increases in equity (excluding contributions from owners) that stem from peripheral or incidental transactions of a company.

Accumulated Depreciation

The cumulative sum of depreciation costs allocated to an asset from the time it was first used.