Xavier and Yolonda Have Original Investments of $50,000 and $100,000

question 25

Multiple Choice

Xavier and Yolonda have original investments of $50,000 and $100,000 respectively in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 15%, salary allowances of $22,000 and $20,000 respectively, and the remainder equally. How much of the net income of $90,000 is allocated to Xavier?

• A) $30,250
• B) $47,750
• C) $45,000
• D) $42,250

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Definitions:

Marginal Utility

The additional satisfaction or utility that a consumer derives from consuming one more unit of a good or service.

Marginal Utility

It describes the additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service.

Total Utility

The overall satisfaction or benefit received by consuming a product or service.

Marginal Utility

The additional satisfaction a consumer gains from consuming one more unit of a good or service.