A Firm Is Considering a One-Time Sale of $100,000 to a Customer.The

question 22

Multiple Choice

A firm is considering a one-time sale of $100,000 to a customer.The cost of goods sold for this sale is $90,000.If the probability of the customer paying is 0.8,what is the expected profit from this transaction?

• A) Zero
• B) -$10,000
• C) +$8,000
• D) +$10,000

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Definitions:

State Unemployment Insurance

A government-mandated program that provides temporary financial assistance to workers who have lost their jobs through no fault of their own.

Employer Payroll Tax

Taxes that employers are required to pay on behalf of their employees, including Social Security, Medicare, and unemployment taxes.

FICA Taxes

FICA Taxes are payroll taxes collected to fund the Social Security and Medicare programs, split between the employer and the employee.

Payroll Tax Expense

The taxes that employers are required to withhold and pay on behalf of their employees, including Social Security and Medicare taxes.