For Each of the Following Definitions, Indicate the Key Term

question 34

Essay

For each of the following definitions, indicate the key term from the list that best matches by placing the appropriate terms.
A. Nonexchange transactions
B. Net assets with donor restrictions
C. Collections
D. Variance power
E. Exchange transactions
F. Board-designated net assets
G. Endowment
H. Promise to give
________ 1. Unrestricted net assets that the governing body decides to set aside for specific purposes
________ 2. The unilateral power of an organization to redirect donated assets to a different beneficiary than initially indicated by the donor
________ 3. Net assets for which the donor has indicated use in a future period or for a particular purpose
________ 4. Transactions in which the donor derives no direct tangible benefits
________ 5. Works or art, historical treasures, or similar assets held and protected for public exhibition, and, if sold, proceeds would be used to acquire similar assets

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Definitions:

Internal Rate of Return

A financial metric used to evaluate the profitability of potential investments, calculating the discount rate that makes the net present value of all cash flows equal to zero.

Payback Period

Payback period is the duration required to recover the cost of an investment, calculated by dividing the initial investment by the annual cash inflow.

Net Present Value

A financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period of time.

Salvage Value

The determined residual amount of an asset at the cessation of its utility.