Which Transaction Would not Necessarily Be Considered a Related Party

question 75

Multiple Choice

Which transaction would not necessarily be considered a related party transaction?

• A)Payment of a bonus to the president.
• B)Purchases from another corporation that is controlled by the corporation's chief stockholder.
• C)Loan from the corporation to a major stockholder.
• D)Sale of land to the corporation by the spouse of a director.

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Definitions:

Marginal Product

The additional output generated by employing one more unit of a certain input, such as labor or capital.

VMPL

The Value of Marginal Product of Labor, which is the additional value created by employing one more unit of labor.

Profit-maximizing

The process by which a firm determines the price and output level that generates the most profit.

MR

Marginal Revenue, which is the extra revenue that an organization receives from selling one more unit of a product.