PRC-3 · Chapter 4 · Question 48 of 65
At the end of the year, Alpha Corp generated Rs. 50 million in net profit. The board decides to keep Rs. 30 million inside the business to fund a new project instead of paying it out to shareholders. This Rs. 30 million is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Retained earnings
Explanation
Retained earnings are the portion of a company's net income that is not distributed as dividends but is instead reinvested into the business.
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