Three Different Companies--A, B, and C--Have the Same Balance Sheet

question 83

Essay

Three different companies--A, B, and C--have the same balance sheet at the beginning and the end of a year. These are summarized below:
$\begin{array}{lll} \text {Total Libilities}&\text {Total Assets}\\\$ 250,000 & \$ 500,000 & \text { Begiming of the year } \\\$ 350,000 & \$ 1,200,000 & \text { End of the year }\end{array}$ Given the data above and the additional information for each company below, determine the net income (loss) for each company.

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Definitions:

Downward Sloping

A characteristic of a graph or curve that shows a decrease in one variable as the other variable increases, often related to demand curves in economics.

Nonconvex Preferences

Preferences where an individual values mixtures of goods or services less than pure bundles, violating the convexity assumption in utility theory.

Perfect Substitutes

Goods or services that can be used in place of each other with no loss of utility to the consumer.

Monotonic Transformation

A mathematical operation applied to a function that preserves the order of the data.