Rylan Corporation received an offer from an exporter for 25,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:
-The amount of the profit or loss from acceptance of the offer is a
A)$125,000 loss
B)$25,000 profit
C)$125,000 profit
D)$25,000 loss

Question

Rylan Corporation received an offer from an exporter for 25,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:  ​
-The amount of the profit or loss from acceptance of the offer is a
A)$125,000 loss 
B)$25,000 profit 
C)$125,000 profit 
D)$25,000 loss

Quizplus · Accepted Answer

The offer is to sell 100,000 shares at $1.25 per share. The current market price is $1.50 per share. The profit from accepting the offer would be 100,000 * (1.50 - 1.25) = $25,000.

Rylan Corporation Received an Offer from an Exporter for 25,000