Which of the Following Was One of the Issues That

question 9

Multiple Choice

Which of the following was one of the issues that was resolved by the decision in Salomon v.Salomon Ltd.,[1897]A.C.22 (H.L.) ?

• A) whether incorporation can be undertaken to limit risk of business bankruptcy
• B) whether shareholders are prohibited from becoming highly protected creditors of the company
• C) whether companies with few shareholders could be recognized as separate legal entities
• D) whether shareholders are totally responsible for their own as well as the entity's obligations

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Definitions:

NPV

Net Present Value; a method used in capital budgeting to assess the profitability of an investment or project.

IRR

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

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.

Tax Impact

The effect of taxation on an individual's or company's financial situation, including tax liabilities and planning.