As in a Proprietorship, Changes in Capital for a Partnership

question 60

Multiple Choice

As in a proprietorship, changes in capital for a partnership may result from three causes. Which one of the following is not a cause for change?

• A) additional investments by owner
• B) drawings
• C) allocating profit to the owner or owners
• D) collection of account receivable

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Definitions:

Products

Goods or services offered by a company to customers in the marketplace.

Crossover Rate

The rate of return at which two projects have the same net present value; used in capital budgeting to evaluate the desirability of investments or projects.

WACC

A measure of a firm's blended cost of capital across all sources, including equity and debt.

NPV

Net Present Value is the calculation used to determine the value of future cash flows in today's dollars, subtracting the initial investment.