One Dollar Saved in Purchasing Is

question 18

Multiple Choice

One dollar saved in purchasing is

• A) equivalent to a dollar earned in sales revenue
• B) worth even more than a dollar earned in sales revenue
• C) worth slightly more than a dollar earned because of taxes
• D) worth from 35% in the technical instrument industry to 70% in the food products industry
• E) only worthwhile if you are in the 50% tax bracket and still have a low profit margin

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Definitions:

Retained Earnings

The portion of a company's net income that is held or retained for reinvestment in the business or to pay debt, rather than being paid out as dividends.

Stock Dividend

A stock dividend is a payment made by a corporation to its shareholders in the form of additional shares, rather than paying dividends in cash, indicating investment back into the company.

Cash Dividend

A payment made by a company out of its earnings to shareholders, usually in the form of cash.

Dividends Payable

A liability indicating the amount of dividends that a company has declared to pay out to its shareholders but has not yet paid.