The Following Information Applies to the Questions Displayed Below

question 25

Multiple Choice

The following information applies to the questions displayed below.

Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions:
1) issued stock for $40,000
2) borrowed $25,000 from its bank
3) provided consulting services for $39,000
4) paid back $15,000 of the bank loan
5) paid rent expense for $9,000
6) purchased equipment costing $12,000
7) paid $3,000 dividends to stockholders
8) paid employees' salaries, $21,000

-What is Yowell's net income?

• A)$9,000
• B)$30,000
• C)$18,000
• D)$6,000

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Definitions:

Discounted Present Value

A method of valuing a future amount of money by applying a discount rate to adjust for time and risk.

Time Period

A specific duration for which economic data is measured or observations made.

Time-Value

The idea that having money now is more valuable than having the same sum in the future because of the potential to earn more over time.