The ________ Shows How the Capital Is Structured in the Business

question 42

Multiple Choice

The ________ shows how the capital is structured in the business, including the value of assets and the amount the firm owes at a specific point in time.

• A) income statement
• B) balance sheet
• C) statement of cash flows
• D) trial balance

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Definitions:

Useful Life

The estimated period over which an asset is expected to be used before it is fully depreciated.

Profitability Index

A ratio that compares the present value of future cash flows of a project to its initial investment, used to assess the desirability of projects.

Investment Proposals

Plans or suggestions put forward for consideration, primarily for the purpose of making investments.

Profitability Index

A capital budgeting tool that calculates the ratio of the present value of future cash flows to the investment’s initial cost.