The Sum of the Current Yield and the Rate of Capital

question 63

Multiple Choice

The sum of the current yield and the rate of capital gain is called the

• A) rate of return.
• B) discount yield.
• C) pertuity yield.
• D) par value.

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Definitions:

Incremental Cash Flows

Additional cash receipts or payments expected from a new project or investment, used in capital budgeting analysis.

Salvage Value

The estimated residual value of an asset at the end of its useful life.

Depreciation

The accounting method of allocating the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Applicable Tax Rate

The applicable tax rate is the percentage at which an individual or corporation is taxed, varying depending on income, profit, or transaction values.