The Balance Sheets at the End of Each of the First

question 173

Multiple Choice

The balance sheets at the end of each of the first two years of operations indicate the following:

-If net income is $250,000 and interest expense is $30,000 for Year 2,what are the earnings per share on common stock for Year 2?

• A)$4.16
• B)$4.32
• C)$4.02
• D)$2.49

---

Definitions:

Inelastic

A description of a situation where the demand or supply for a good or service is relatively unresponsive to changes in price.

Price Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in its price, indicating the sensitivity of demand or supply to price changes.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price, holding all other factors constant.

Inelastic

Refers to a scenario in which a change in price leads to a comparatively small change in the quantity demanded or supplied.