What Is the Problem That Equity Has Been Called Upon

question 5

Multiple Choice

What is the problem that equity has been called upon to solve in relation to ownership of property by unincorporated clubs or societies?

• A) Members cannot easily open bank accounts or arrange functions.
• B) The fact that such societies have no legal personality means that cannot function until they are incorporated.
• C) Members cannot raise funds by subscription to fund activities.
• D) Lack of legal personality means that societies cannot receive legacies or easily distribute assets on dissolution of the society.

---

Definitions:

Present Value

The present worth of a future amount of money or series of cash inflows, calculated using a given rate of return.

Annual Net Cash Flows

Annual net cash flows represent the amount of cash a company generates or loses within a year from its operating, investing, and financing activities.

Required Return

The minimum amount of profit or gain an investor expects to achieve from an investment to make it worthwhile.

Net Present Value Method

A financial modeling technique that evaluates the profitability of an investment by discounting future cash flows to their present value and subtracting the initial investment.