Which of the Following Would Be Classified as a Noncurrent

question 38

Multiple Choice

Which of the following would be classified as a noncurrent liability on the balance sheet at December 31,Year 1?

• A)An accounts payable due on January 30,Year 2
• B)A notes payable due November 30,Year 2
• C)A note receivable that matures on April 30,Year 3
• D)A notes payable due January 15,Year 3

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Definitions:

Internal Rate of Return

The discount rate at which the net present value of all cash flows from a project equals zero, used to assess the profitability of potential investments.

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and attract funds.

Net Present Value

A financial metric that calculates the present value of an investment's expected cash flows minus the initial investment cost.

Internal Rate of Return

The discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.