The Principal Instruments Through Which Business Uses Its Financial Resources

question 17

Multiple Choice

The principal instruments through which business uses its financial resources to influence government are

• A) umbrella organizations.
• B) political action committees.
• C) trade associations.
• D) lobbyists.

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Definitions:

Capital Accounts

Financial records that show the capital contributions, withdrawals, and earnings of owners in a company.

Cost of Capital

The rate of return a company must offer investors to entice them to invest, reflecting the risk of the investment alongside the return.

IRR

An economic indicator, the Internal Rate of Return is utilized to assess the possible profitability of investment opportunities.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project, calculated by summing the present values of incoming and outgoing cash flows.