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Problem 1: Aroma Limited owns a 25% interest in the shares of Baltic Corporation. During the year, Baltic pays $10,000 in dividends to Aroma and reports $100,000 net income. Aroma's investment in Baltic will increase Aroma's net income by
a) $25,000.
b) $27,500.
c) $10,000.
d) $ 2,500.
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