Tanner,Schmidt,and Hayes Are Partners with Capital Account Balances of $100,000,$120,000,and

question 4

Multiple Choice

Tanner,Schmidt,and Hayes are partners with capital account balances of $100,000,$120,000,and $96,000 respectively.They share profits and losses in a 3:4:3 ratio.Schmidt wishes to leave the partnership and will be paid $125,000.What are the remaining capital account balances after Schmidt withdraws?

• A)Tanner $95,500; Hayes $95,500.
• B)Tanner $102,500; Hayes $98,500.
• C)Tanner $100,000; Hayes $96,000.
• D)Tanner $97,500; Hayes $93,500.
• E)Tanner $100,000; Hayes $91,000.

---

Definitions:

Large Sums

Large sums typically refer to a significantly high amount of money in various financial contexts, including investments, transactions, or savings.

Mutually Exclusive Projects

In capital budgeting, projects that automatically exclude one another. Projects are mutually exclusive either because they’re different approaches to doing the same thing or because limited resources preclude doing more than one.

Meeting Need

The process or action of satisfying a requirement, demand, or essential condition.

Profitability Index

A calculation used to assess the desirability of an investment, based on its present value of future cash flows relative to its initial cost.