You Have Been Given the Following Information for Halle's Holiday

question 6

Multiple Choice

You have been given the following information for Halle's Holiday Store Corp. for the year 2013: Net sales = $50,000,000;
Cost of goods sold = $35,000,000;
Addition to retained earnings = $2,000,000;
Dividends paid to preferred and common stockholders = $3,000,000;
Interest expense = $3,000,000.The firm's tax rate is 30 percent.In 2014, net sales are expected to increase by $5 million,
Cost of goods sold is expected to be 65 percent of net sales,
Expensed depreciation is expected to be the same as in 2013,
Interest expense is expected to be $2,500,000,
The tax rate is expected to be 30 percent of EBT, and
Dividends paid to preferred and common stockholders will not change.What is the addition to retained earnings expected in 2014?

• A)$2,000,000
• B)$5,325,000
• C)$8,447,500
• D)$10,304,643

---

Definitions:

Discriminative Stimulus

A specific stimulus in the presence of which a particular response is more likely to be reinforced.

Fixed-Interval Schedule

In operant conditioning, a reinforcement schedule that reinforces a response only after a specified time has elapsed.

Latent Learning

Latent learning is the process by which knowledge is acquired without any immediate manifestation of learned behavior or obvious reinforcement.

Cognitive Processes

Mental processes involved in gaining knowledge and understanding, including perception, thinking, memory, judgment, and problem-solving.