The Federal Government

question 19

Multiple Choice

The federal government

• A) is the largest taxing entity in the country.
• B) is only concerned with international issues.
• C) spends heavily on net interest.
• D) all of these answer options are correct.

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Definitions:

Return on Assets

A financial ratio that shows the percentage of profit a company earns in relation to its overall resources (total assets).

Net Present Value

In capital budgeting, this refers to the variance between the current value of incoming cash and the current value of outgoing cash across a specific period, utilized to determine an investment's profit potential.

Present Value

The contemporary value of money expected to be received in the future or a flow of cash, discounted by a certain rate of return.

IRR

The Internal Rate of Return (IRR) is a financial metric used to estimate the profitability of potential investments by calculating the interest rate at which the net present value of costs (cash outflows) of the investments equals the net present value of the benefits (cash inflows).