Team Shirts Had a Return on Equity of 23

question 79

Multiple Choice

Team Shirts had a return on equity of 23%.Average shareholders' equity for the corporation was $123,000.There were 45,000 common shares and no preferred shares outstanding.What was net income for the year?

• A)$28,290
• B)$10,350
• C)$534,782.61
• D)$195,652.17

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Definitions:

Salary Smoothing

The practice of moderating the fluctuations in an employee's pay through methods that stabilize income, such as averaging earnings over time or providing benefits that reduce the impact of income variability.

Payroll Deductions

The amounts withheld from an employee's payroll for taxes, insurance premiums, benefits, and other similar expenses.

Myopia

Short-sightedness, either literally in terms of vision or metaphorically in planning or decision-making.

Behavioral Economics

A field of study that analyzes the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions, and the consequences for market prices, returns, and resource allocation.