Total Assets Are $37,500,total Liabilities Are $20,000 and Common Stock

question 86

True/False

Total assets are $37,500,total liabilities are $20,000 and common stock is $10,000;therefore,retained earnings are $7,500.

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Definitions:

Profitability Index

A ratio that calculates the relative profitability of an investment by dividing the present value of future expected cash flows by the initial investment cost.

Initial Investment

The amount of money used to start a project, investment, or business.

Cash Inflows

Funds entering a business from various sources, including sales, investments, and financing activities, critical for maintaining liquidity.

Payback Period

The time it takes for an investment to generate an amount of income or cash equivalent to the cost of the investment.