-Assume That Firm a Can Increase Earnings by $4,000,by Cutting

question 103

Multiple Choice

$\begin{array}{lrrr}&\text { Firm A }&\text { Firm B }&\text { Firm C }\\\text { Actual earnings } & \$ 6,000 & \$ 14,000 & \$ 18,000 \\r & 10 \% & 8 \% & 12 \% \\B V_{t-1} & \$ 100,000 & \$ 150,000 & \$ 190,000\end{array}$
-Assume that Firm A can increase earnings by $4,000,by cutting costs.Abnormal earnings would be

• A)($1,000).
• B)$0.
• C)$1,000.
• D)$1,500.

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