Under the Corporate Form of Business Organization

question 21

Multiple Choice

Under the corporate form of business organization,

• A) ownership rights are easily transferred
• B) a stockholder is personally liable for the debts of the corporation
• C) stockholders' acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation
• D) stockholders wishing to sell their corporate shares must get the approval of other stockholders

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Definitions:

Present Value

Today's worth of a forthcoming sum of money or series of cash payments, considering a designated rate of return.

Capital Investment Analysis

The process of evaluating and comparing potential investments or expenditures to determine their profitability and financial impact on the business.

Net Present Value Method

A method of evaluating the feasibility of projects or investments by calculating their net present value using a discount rate.

Average Rate of Return

A financial ratio that measures the profitability of an investment by dividing the average annual profit by the initial investment cost.