The Difficulty of Converting Savings and Investments to Cash Is

question 76

Multiple Choice

The difficulty of converting savings and investments to cash is referred to as ____________ risk.

• A) interest-rate
• B) inflation
• C) income
• D) personal
• E) liquidity

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Definitions:

Pretax Return

The profit a company generates before any taxes are deducted, often used to analyze the profitability of core business activities.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period, used to assess the profitability of an investment.

Salvage Value

The estimated monetary value of an asset at the cessation of its useful duration.

Labor Costs

Expenses related to compensating employees for their work, including wages, salaries, and benefits.