Madrid Company Has Provided the Following Data (Ignore Income Taxes)

question 29

Multiple Choice

Madrid Company has provided the following data (ignore income taxes) :
2010 revenues were $77,500.
2010 net income was $33,900.
Dividends declared and paid during 2010 totaled $5,700.
Total assets on December 31,2010 were $217,000.
Total stockholders' equity on December 31,2010 was $123,000.
Retained earnings on December 31,2010 were $83,000.
Which of the following is not correct?

• A)2010 expenses were $43,600.
• B)Total liabilities on December 31, 2010 were $94,000.
• C)Retained earnings increased $33,900 during 2010.
• D)Contributed capital on December 31, 2010 was $40,000.

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Definitions:

Discounted Payback

A capital budgeting method that calculates the time needed to recoup the initial investment in present value terms.

Compute

The process of using mathematical and logical operations to perform tasks and solve problems by a computer.

Average Accounting Return

The average accounting return is a financial ratio that represents the average annual accounting profit compared to the initial investment.

IRR

Internal Rate of Return, a financial metric used to estimate the profitability of potential investments by finding the interest rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.