If Not Enough Partnership Cash or Other Assets Are Available

question 59

True/False

If not enough partnership cash or other assets are available to pay the withdrawing partner, a liability may be created for the amount owed the withdrawing partner.

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Definitions:

Independent Projects

Projects in a company that can be selected or rejected independently of one another, without affecting the profitability or potential of other projects.

Conventional Cash Flows

A series of net income figures expected to be generated by an investment, starting with a negative cash flow at the beginning (investment outlay), followed by a series of positive cash flows.

Internal Rate of Return

The rate of discount at which the total net present value of a project or investment's cash inflows and outflows balances out to zero.

Conventional Cash Flows

Cash flow patterns characterized by an initial outflow (investment) followed by a series of positive cash inflows.