Which of the Following Statements Is Correct

question 27

Multiple Choice

Which of the following statements is correct?

• A)Dividend income is a component of operating income.
• B)Operating income is decreased by the loss from the sale of plant assets.
• C)A gain on the sale of a stock investment doesn't increase operating income.
• D)Income before taxes doesn't change when a gain results from the sale of plant assets.

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Definitions:

Expected Rate

A forecasted value, often referring to interest or growth rates, based on current and historical data.

Expected Rate

In finance, it typically refers to the predicted average rate of return on an investment over a specified period.

Standard Deviation

A statistical measure that quantifies the amount of variability or dispersion of a set of data values around the mean (average).

Risk-Free Asset

A financial instrument that is considered to have no risk of financial loss and typically features a guaranteed rate of return, such as government bonds.