Which One of the Following Is Not a Cash Equivalent

question 15

Multiple Choice

Which one of the following is not a cash equivalent?

• A) 30-day certificate of deposit
• B) 60-day commercial paper
• C) 90-day U.S.treasury bill
• D) 180-day note issued by a local or state government

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Definitions:

Cash Outflow

Payments or expenditures made by a business or an individual, leading to a decrease in cash assets.

Cost of Capital

The rate of return a company must earn on its investments to maintain its market value and attract funds.

Rate of Return

A financial ratio that calculates the percentage of profit or loss made on an investment relative to its cost.

Internal Rate

Often referring to the internal rate of return (IRR), it's the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.