Which of the Following Describes a Trust in Which the Trustee

question 27

Multiple Choice

Which of the following describes a trust in which the trustee has the power to choose beneficiaries along with the amount of proceeds they are to be paid?

• A)Fixed trust.
• B)Trading trust.
• C)Discretionary trust.
• D)Constructive trust.

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Definitions:

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project, comparing the value of all cash inflows and outflows over time, discounted back to their present value.

Indirect Bankruptcy Costs

The costs associated with bankruptcy that are not directly related to legal or administrative expenses, such as lost sales, customers, or suppliers.

Financial Leverage

Employing debt to boost the potential earnings from an investment.

Debt-Equity Ratio

A ratio illustrating the financial strategy of using debt versus equity in asset financing for a company.