When Calculating Net Investment Income, Gross Investment Income Includes

question 33

Multiple Choice

When calculating net investment income, gross investment income includes:

• A) interest income
• B) net short-term capital gains
• C) non-qualified dividends
• D) royalty income
• E) All of these

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Definitions:

Pretax Return

The income or profit earned by a business before the deduction of tax.

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time, used to assess the profitability of an investment.

Annual Cash Savings

The amount of money saved over the course of a year as a result of cost-cutting measures, efficiency improvements, or other savings opportunities.

Discount Rate

The interest rate used to discount future cash flows to their present value, thereby reflecting the time value of money.