On December 1,2020,Eagle Company Sold Machinery to a Customer for $22,000.The

question 15

Multiple Choice

On December 1,2020,Eagle Company sold machinery to a customer for $22,000.The customer could not pay at the time of sale but agreed to pay 6 months later and signed a 6-month note at 12% interest.How much interest revenue was earned for the entire term of the note? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

• A) $1320
• B) $1100
• C) $220
• D) $2640

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Definitions:

Retained Earnings

Profits that a company has chosen to reinvest in the business rather than distribute to shareholders as dividends, accumulated over time.

Hurdle Rate

The project cost of capital, or discount rate. It is both the rate used in discounting future cash flows in the net present value method and the rate that is compared to the internal rate of return.

Intrinsic Value

The actual value of a company, asset, or currency determined through fundamental analysis without reference to its market value.

Risk-Adjusted

Pertaining to the modification of financial analysis or return on an investment to account for the risk involved, ensuring a more accurate assessment of performance or value.