Which of the Following Is True About a Limited Partnership

question 43

Multiple Choice

Which of the following is true about a limited partnership?

• A)A limited partnership has difficulties raising large amounts of capital.
• B)A limited partnership can be created only by complying with a state statute permitting limited partnerships.
• C)A limited partnership cannot be transferred to another person.
• D)Limited partners are liable for the obligations of the limited partnership after making their capital contributions.

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Definitions:

Profitability Index

A financial tool used to evaluate the desirability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specific rate of return.

Cash Inflows

Money received by a business, typically from sales, investments, financing, and other business activities.

Project Profitability Index

A financial metric used to determine the relative profitability of a project, calculated by dividing the present value of future expected cash flows by the initial investment.