What Amount of Equity Income Would Anderson Recognize in 2018

question 18

Multiple Choice

What amount of equity income would Anderson recognize in 2018 from its ownership interest in Barney?

• A) $12,000 income.
• B) $12,000 loss.
• C) $16,000 loss.
• D) $28,000 income.
• E) $28,000 loss.

---

Definitions:

Purchasing Power Risk

The risk that the value of money will decrease over time due to inflation, affecting the real value of investments and savings.

Investment Principal

A sum of money invested initially in a financial instrument or vehicle, which serves as the base on which returns or interest is calculated.

Passive Asset Allocation

An investment strategy that aims to build a portfolio mimicking a market index's composition, requiring minimal buying and selling.

Proportions

The quantitative relationship between two amounts, showing the number of times one value contains or is contained within the other.