Consider the following table of Actual earnings: Firm A Firm B Firm C Actual earnings $ 6,000 $ 14,000 $ 18,000 r 10 % 8 % 12 % BVt-1 $ 100,000 $ 150,000 $ 190,000 What are the abnormal earnings for Firm A? Multiple Choice $(4,000) $(6,000) $4,000 $6,000

Consider the following table of Actual earnings: Firm A Firm B Firm C Actual earnings $ 6,000 $ 14,000 $ 18,000 r 10 % 8 % 12 % BVt-1 $ 100,000 $ 150,000 $ 190,000 What are the abnormal earnings for Firm A? Multiple Choice $(4,000) $(6,000) $4,000 $6,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Consider the following table of Actual earnings:

	Firm A		Firm B	Firm C
Actual earnings	$	6,000		$	14,000		$	18,000
r		10	%		8	%		12	%
BV_t-1	$	100,000		$	150,000		$	190,000

What are the abnormal earnings for Firm A?

Multiple Choice

$(4,000)
$(6,000)
$4,000
$6,000

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