After earning $30 million in net income, Rolatrim Industries distributed $5 million in dividends to their stockholders. The board of directors of the firm decided to invest the remaining $25 million back into the business. This $25 million reinvestment of profits represents:

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Retained earnings are profits that a company has earned but has not distributed to its shareholders as dividends. Instead, the company holds onto the profits to reinvest them in the business. In this case, Rolatrim Industries reinvested $25 million of their $30 million net income, making it an example of retained earnings.

After Earning $30 Million in Net Income, Rolatrim Industries Distributed