Contributed Capital Is Measured By

question 41

Multiple Choice

Contributed capital is measured by:

• A)the cost of assets contributed to the firm by stockholders.
• B)the market value of assets contributed to the firm by stockholders.
• C)the book value of assets contributed to the firm by stockholders.
• D)the discounted present value of assets contributed to the firm by stockholders.

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Definitions:

Discounted Payback Period

The time it takes to break even from an investment based on the present value of its cash flows.

Projects

Specific tasks or endeavors undertaken by individuals or organizations to achieve particular goals, often involving a series of planned actions or steps.

Payback

Payback period refers to the time it takes for an investment to generate enough cash flow to recover its initial cost.

Profitability Index

is a capital budgeting tool that measures the relationship between the present value of cash flows and the initial investment, indicating the value created per dollar invested.