David, Ed, and Fred Are Partners in the DEF Partnership

question 44

Multiple Choice

David, Ed, and Fred are partners in the DEF partnership. The partnership is being dissolved, having $200,000 in assets and owing $410,000 to creditors. David contributed $100,000 in capital; Ed contributed $50,000 in capital; and Fred contributed $25,000 in capital. Profits are shared equally. Which of the following is correct with regard to the responsibility of each partner?

• A) The partners will bear losses equally.
• B) The partners will bear losses in the proportion of their relative capital contributions.
• C) If Ed refuses to contribute to covering the loss and he is out of the jurisdiction, David and Fred must contribute the additional amount necessary to pay DEF's liabilities in the relative proportion of their capital contributions.
• D) Any of these could be true, depending on the partnership agreement.

Recognize the importance of environmental factors and community infrastructure in disease prevention.

Understand the historical development of public health initiatives and their impact on community health.

Analyze the role of government and non-governmental organizations in the advancement of public health.

Identify key figures and their contributions to public health and nursing.

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Definitions:

Discounted Payback

A capital budgeting method used to determine the profitability of an investment by calculating the time it takes for the present value of cash flows to cover the initial investment cost.

Annual Cash Flows

The total amount of money being transferred in and out of a business, considered on a yearly basis.

Required Rate

The minimum return an investor expects to achieve on an investment, considering its risk, also known as the hurdle rate or the required rate of return.

Internal Rate Return

A financial metric used to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value (NPV) of all cash flows from the investment equal to zero.