After a Successful Five Years, Peaceful Pastures, LLC (A Retirement

question 201

True/False

After a successful five years, Peaceful Pastures, LLC (a retirement ranch for race horses), thinks it may be able to attract donations from animal activist groups and even the federal government if it becomes a nonprofit corporation. As its business advisor, you explain that as a nonprofit corporation, the owner(s) may earn a salary but the business should not seek after-tax profits.

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Definitions:

Discount Rate

The interest rate charged to commercial banks and other financial institutions for the loans they take from a country's central bank or Federal Reserve.

Issued Price

The price at which a new security is offered to the public for the first time.

Market Rate of Return

The average return on investment that is typical for a particular market or industry.

T-bill

Short-term government securities issued at a discount from the face value and maturing at par, used to finance government debt.