Which of the Following Statements Is Correct

question 14

Multiple Choice

Which of the following statements is correct?

• A)Dividend revenue is a component of Income from Operations.
• B)Income from Operations is decreased by a loss from the sale of plant assets.
• C)A gain on the sale of a stock investment increases Income from Operations.
• D)Income before taxes occurs before Other Items on the income statement.

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Definitions:

Real Option

The flexibility to make decisions on investments, such as the timing of projects or the expansion of operations, based on the evolution of market conditions.

Expansion Option

The opportunity or ability to invest additional capital in a project, based on its successful performance or other factors.

NPV

Net present value, a calculation that reflects the present value of future cash flows minus initial investments, used to assess the profitability of a project.

Real Option

An approach in financial management that values investment options as if they were financial options, focusing on the flexibility of managerial decisions in response to market changes.