Someone Who Has to Decide Whether to Receive $100 Now

question 257

Multiple Choice

Someone who has to decide whether to receive $100 now or $100 one year from now will probably choose _____, since there is a(n) _____ in waiting to use money.

• A)one year from now; benefit
• B)now; opportunity cost
• C)one year from now; opportunity cost
• D)now; benefit

Calculate and interpret earnings per share for companies with common and preferred stock.

Understand the concept and implications of retained earnings restrictions.

Recognize the accounting treatments and implications of stock dividends and cash dividends.

Prepare journal entries for dividend declarations and payments.

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Definitions:

Time Value

The concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.