The Difference Between the Present Value of an Investment and Its

question 164

Multiple Choice

The difference between the present value of an investment and its cost is the:

• A) Net present value.
• B) Internal rate of return.
• C) Payback period.
• D) Profitability index.
• E) Discounted payback period.

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Definitions:

Owners' Equity

The residual interest in the assets of a company after deducting liabilities, representing the ownership interest of shareholders in the company.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, showing the balance between income and expenditure.

Stock Dividend

A dividend payment to shareholders in the form of additional shares rather than cash.

Owners' Equity

The residual interest in the assets of a company after deducting liabilities, representing the ownership stake of the shareholders.