Interest Group Activity Increased Considerably in the 1880s and 1890s

question 63

Multiple Choice

Interest group activity increased considerably in the 1880s and 1890s as a result of the

• A)beginning of the Civil War.
• B)Supreme Court's ruling in Plessy v.Ferguson.
• C)first federal government efforts at economic intervention to fight large monopolies and to regulate some aspects of interstate commerce.
• D)Great Depression.

Understand the distinctions between different forms of business organizations, including proprietorships, partnerships, and corporations.

Identify the bodies responsible for developing accounting principles and their significance.

Grasp the principle of economic entity assumption and its implication for accounting practices.

Differentiate between historical cost and fair value, and understand their respective roles in financial reporting.

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Definitions:

Cost of Capital

The rate of return a company must earn on its investment projects to maintain its market value and satisfy its shareholders.

Reinvestment Assumption

The presumption that cash flows received from an investment will be reinvested at a consistent rate over the life of the investment.

Net Present Value

A financial measure that calculates the present value of net cash flows (inflows minus outflows) from an investment, discounting future cash flows to the present.

Internal Rate of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculated as the rate that makes the net present value of cash flows equal to zero.