Capital Gains Are Included in the Return on an Investment

question 20

Multiple Choice

Capital gains are included in the return on an investment:

• A)when either the investment is sold or the investment has been owned for at least one year.
• B)only if the investment is sold and the capital gain is realized.
• C)whenever dividends are paid.
• D)whether or not the investment is sold.
• E)only if the investment incurs a loss in value or is sold.

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Definitions:

Sales Increase

A situation where a company experiences a rise in the volume or value of its product sales over a particular period.

Operating Capacity

The maximum output a company can produce using its current resources and technology.

Pro Forma

A financial statement prepared on the basis of some assumed events and transactions that have not yet occurred.

Net Fixed Assets

The value of a company's property, plant, and equipment minus any accumulated depreciation, representing the actual value of the company's fixed assets.