Which of the Following Is True of a Promissory Note

question 13

Multiple Choice

Which of the following is true of a promissory note?

• A) It is always considered a negotiable instrument.
• B) It acknowledges the existence of the payee.
• C) It can be an unwritten promise to pay money.
• D) It contains a promise made by the payee.

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Definitions:

Cost of Capital

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

Net Present Value

A financial metric that calculates the present value of an investment's expected cash flows minus the initial investment cost.

Internal Rate of Return

The discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Cost of Capital

The rate of return a company must earn on its investment projects to maintain its market value and satisfy its shareholders.