Which of the Following Best Represents a Screening Decision

question 169

Multiple Choice

Which of the following best represents a screening decision?

• A)determining which project has the highest net present value
• B)determining if a project's internal rate of return exceeds the firm's cost of capital
• C)determining which projects are mutually exclusive
• D)determining which are the best projects

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Definitions:

Collateral

Assets pledged by a borrower to secure a loan or ensure repayment, which can be seized by the lender in the event of default.

Financing Statement

A document prepared by a secured creditor and filed with the appropriate government official to give notice to the public that the creditor claims an interest in collateral belonging to the debtor named in the statement. The financing statement must contain the names and addresses of both the debtor and the creditor, and describe the collateral by type or item.

Trade Name

The name under which a business operates and is known to the public, distinct from the legal name of the business entity.

Perfection

The legal process by which secured parties protect themselves against the claims of third parties who may wish to have their debts satisfied out of the same collateral; usually accomplished by the filing of a financing statement with the appropriate government official.