Charles and Ellen,an Unmarried Couple,run an Ice Cream Store

question 36

Multiple Choice

Charles and Ellen,an unmarried couple,run an ice cream store.The business is not incorporated and they have filed no formation papers with the state.Their business is a:

• A) sole proprietorship.
• B) partnership.
• C) joint venture.
• D) limited liability company.

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Definitions:

Payback Period

The duration it takes for an investment to return its original cost to the investor.

NPV

Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or project by discounting all expected future cash flows back to their present value.

Profitability Index

A financial tool that calculates the relationship between the costs and benefits of a project by dividing the present value of future cash flows by the initial investment cost.

Mutually Exclusive

Situations or events that cannot occur at the same time—choosing one precludes the selection of the other.