For the Current Year, Blue Co

question 97

Multiple Choice

For the current year, Blue Co. had net income of $200,000, beginning Stockholders' Equity $500,000 and ending Stockholders' Equity $535,000. Greene Co. had net income of $100,000, beginning Stockholders' Equity $900,000 and ending Stockholders' Equity $950,000. Which of the following statements is TRUE regarding this scenario?

• A)Blue Co. has a lower return on equity at 10.8% than Greene Co. does at 38.6%.
• B)Blue Co. is more profitable, because its net income is higher.
• C)Blue Co. has a higher level of earnings relative to the amount of stockholders' equity.
• D)Blue Co. is a less risky investment than Greene Co.

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Definitions:

Conditional Discrimination

The process where an organism learns to respond differently to various stimuli depending on the conditions or context.

Discrimination Learning

The ability to differentiate between different stimuli and respond appropriately to each.

Prefrontal Cortex

The front part of the frontal lobes of the brain, involved in executive functions such as judgement, decision-making, and social behavior.

Generalization Gradient

A measure of how an organism responds to various stimuli that are similar but not identical to the conditioning stimulus, showing a gradation in response strength.