By Holding a Knife to His Back, Ed Compelled Sean

question 73

Multiple Choice

By holding a knife to his back, Ed compelled Sean to sign a contract advantageous to Ed. This contract was entered under:

• A) physical duress.
• B) improper threats.
• C) undue influence.
• D) false representation.

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Definitions:

Profitability Index (PI)

A calculation that determines the relative profitability of an investment, indicating the ratio of payoff to investment amount.

Internal Rate of Return (IRR)

The Internal Rate of Return (IRR) is the rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero, used as a benchmark to decide the profitability of an investment.

Net Present Value (NPV)

NPV is a financial metric used in capital budgeting to assess the profitability of an investment or project, calculated as the difference between the present value of cash inflows and outflows.

Capital Budgeting

The process by which investors or company management evaluate and select long-term investments that are likely to yield positive returns.