Zeek has net income of $20,000. The book value of equity_(t-1) is $125,000. The cost of equity is 20%. Zeek is proposing disposing of $10,000 of unproductive assets. The net income will not change if Zeek disposes of the unproductive assets. What will Zeek have as abnormal earnings if Zeek disposes of the unproductive assets?

• $3,000
• $20,000
• $25,000
• $23,000

Answer rating: 100% (QA)

Beginning equity125000 Equity after ... View the full answer