Liquidation Refers to The

question 13

Multiple Choice

Liquidation refers to the:

• A) negative effect felt by a company when it is found out that a company has done something not in accord with good business practices.
• B) choice between making money or controlling and running a business.
• C) sale of a business's assets.
• D) passing the business to the next generation.
• E) Process through which venture capitalists invest in floundering firms in the hope that they will turn around.

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Definitions:

Sunk Cost

A cost that has already been incurred and cannot be recovered, and should not affect future investment or spending decisions.

Capital Budgeting

The process used by businesses to evaluate and prioritize investments in long-term assets and projects based on their potential returns.

NPV

Net Present Value; a financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period of time.

IRR

Stands for Internal Rate of Return, a financial metric used to evaluate the profitability of potential investments.