Sarah and Candice want to start a business together in the women's apparel and accessories industry. While Sarah thinks that they should hire designers and establish their own clothing brand from scratch, Candice believes that it will be easier to start the business by obtaining the franchise rights from an already established designer brand called Monarch. Which argument made by Candice will be valid in convincing Sarah to accept the idea of starting a business by obtaining the franchise rights of Monarch?

a. They will have greater freedom to make business-related decisions if they obtain the franchise.
b. They will have greater flexibility to add or delete a product from the existing line if they obtain the franchise.
c. They can effectively leverage the national and local advertising programs sponsored by the franchiser.
d. They can earn good revenues without having to pay any fee or share profits with the franchiser.
e. They can commercialize their creativity and ideas without facing any restrictions from the franchiser.

Selected information about income statement accounts for the reed company is presented below (the company's fiscal year ends on december 31): 2018 2017sales $ 4,400,000 $ 3,500,000cost of goods sold 2,860,000 2,000,000administrative expenses 800,000 675,000selling expenses 360,000 312,000interest revenue 150,000 140,000interest expense 200,000 200,000loss on sale of assets of discontinued component 50,000 —on july 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by gaap. the assets of the component were sold on september 30, 2018, for $50,000 less than their book value. results of operations for the component (included in the above account balances) were as follows: 1/1/18-9/30/18 2017 sales $ 400,000 $ 500,000 cost of goods sold (290,000 ) (320,000 )administrative expenses (50,000 ) (40,000 )selling expenses (20,000 ) (30,000 )operating income before taxes $ 40,000 $ 110,000 in addition to the account balances above, several events occurred during 2018 that have not yet been reflected in the above accounts: a fire caused $50,000 in uninsured damages to the main office building. the fire was considered to be an infrequent but not unusual event.inventory that had cost $40,000 had become obsolete because a competitor introduced a better product. the inventory was sold as scrap for $5,000.income taxes have not yet been recorded.required: prepare a multiple-step income statement for the reed company for 2018, showing 2017 information in comparative format, including income taxes computed at 40% and eps disclosures assuming 300,000 shares of common stock. (amounts to be deducted should be indicated with a minus sign. round eps answers to 2 decimal places.)