A Corporation Purchased 1,000 Shares of Its Own $5 Par

question 1

Multiple Choice

A corporation purchased 1,000 shares of its own $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What amount of revenue is realized from the sale?

• A) $0
• B) $5,000
• C) $2,500
• D) $10,000

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Definitions:

Sports Bar

A bar or tavern that provides a venue for people to watch sporting events, often equipped with multiple large-screen televisions.

Normal Return

The minimum profit needed by investors to justify the capital invested in a business venture, often equated to the opportunity cost.

Total Revenue

Total Revenue is the total amount of money received by a firm from sales of goods or services before any expenses are deducted.

Economic Profit

The contrast between cumulative revenue and cumulative costs, taking into account both clear and veiled expenses.