Maple City Has a Permanent Fund That Reported Current-Year Investment

Maple City has a permanent fund that reported current-year investment earnings (realized and unrealized) of $80,000. The endowment principal is $800,000 and the city council has adopted a policy of considering only the inflation-adjusted rate of return to be available for transfer to the recipient fund. During the current year the council declared the inflation-adjusted rate of return to be 8 percent. How much revenue would be recognized in the permanent fund?

A) $ 0.
B) $ 64,000.
C) $ 80,000.
D) Insufficient information to determine.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free