Question
UhlerManufacturing has income of $25,000. The cost of equity is 20% and the book value (t-1) is $125,000.Uhlerbelieves that they can eliminate costs by $5,000,
UhlerManufacturing has income of $25,000. The cost of equity is 20% and the book value(t-1)is $125,000.Uhlerbelieves that they can eliminate costs by $5,000, raising the income. By how much will the abnormal earning change ifUhlereliminatesthe costs?
| increase$5,000 |
| increase$4,000 |
| decrease$4,000 |
| no change |
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Financial & Managerial Accounting
Authors: Carl Warren
12th Edition
1285534646, 978-1133952428
