A Company That Owns More Than 50% of the Common

question 64

Multiple Choice

A company that owns more than 50% of the common stock of another company is known as the

• A) charge company.
• B) subsidiary company.
• C) parent company.
• D) management company.

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Definitions:

Initial Investment

The initial amount of money invested in a project or startup business.

Salvage Value

The projected salvage value of an asset at the termination of its useful life.

Net Present Value

A method used in capital budgeting to analyze the profitability of an investment or project, calculating the difference between the present value of cash inflows and outflows over a period of time.

Pretax Return

The earnings generated by an investment or business before taxes have been deducted.