Current Liabilities Are Obligations Whose Liquidation Is Reasonably Expected to Require

question 49

Multiple Choice

Current liabilities are obligations whose liquidation is reasonably expected to require the use of existing current assets or the creation of other current liabilities within

• A)one year or operating cycle, whichever is longer
• B)one year
• C)one year or operating cycle, whichever is shorter
• D)an operating cycle

---

Definitions:

IRR Method

A financial analysis tool used to evaluate the profitability of investments based on the internal rate of return, which calculates the rate at which the net present value of all cash flows is zero.

Cost of Capital

The yield a corporation needs to generate from its investment initiatives to keep its market valuation steady and draw in financing.

Stand-Alone Project

In capital budgeting, a project with no competition either for the task it is to accomplish or for resources.

Cost of Capital

The rate of return a company must pay to its investors for the use of their capital, essentially the cost of financing and investing in the company's assets.