If Equity at the Beginning of the Period Is $180,000

question 40

Multiple Choice

If equity at the beginning of the period is $180,000, profit for the period is $90,000 and $25,000 is withdrawn by the owner during the period, equity at the end of the period is:

• A)$115,000.
• B)$245,000.
• C)$289,000.
• D)cannot be calculated from the information provided.

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Definitions:

Future Value

Financial value of an asset or cash set for a future date, equivalent to a fixed present sum.

Annuity

A financial instrument that provides a consistent series of payments to a person, often utilized in planning for retirement.

Continuous Compounding

The process of calculating interest on an investment or loan continuously, leading to the accumulation of interest upon interest, often resulting in higher yields.