Question
Uhler Manufacturing has income of $25,000. The cost of equity is 20% and the book value(t-1) is $125,000. Uhler believes that they can eliminate costs
Uhler Manufacturing has income of $25,000. The cost of equity is 20% and the book value(t-1) is $125,000. Uhler believes that they can eliminate costs by $5,000, raising the income. By how much will the abnormal earning change if Uhler eliminates the costs?
increase $4,000
increase $5,000
decrease $4,000
no change
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Principles Of Financial Accounting
Authors: Jerry J. Weygandt, Lorena Mitrione, Michaela Rankin, Keryn Chalmers, Paul D. Kimmel
3rd Edition
0730302296, 978-0730302292
