The Local Allied Moving Company Begins This Year with Capital

question 32

Multiple Choice

The local Allied Moving Company begins this year with capital equal to $250,000. During the year the firm depreciates $150,000 worth of its capital and ends the year with capital equal to $250,000. Which statement correctly summarizes Allied Moving Company's investment?

• A)Allied Moving Company made no capital investment during the year.
• B)Allied Moving Company made net investment of $150,000 during the year.
• C)Allied Moving Company made no gross investment during the year.
• D)Allied Moving Company made gross investment of $250,000 during the year.
• E)Allied Moving Company made no net investment during the year.

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Definitions:

Asset Base

The aggregate of all the resources owned by a person or organization, which can potentially be used to generate income.

Nonbankable Gaps

Funding or credit needs of a business that cannot be met by traditional bank financing, usually requiring alternative sources of capital.

Entrepreneurial Finance

The study and application of financial resources and tools to start, grow, or sustain entrepreneurial ventures.

Fund-Raising Strategies

Techniques and approaches used to generate financial support for a cause, project, or organization, often involving various forms of solicitation and campaigns.