An Estimate of an Asset's Value to the Company, Calculated

question 145

Multiple Choice

An estimate of an asset's value to the company, calculated by discounting the future cash flows from the investment at the project's required rate of return and then subtracting the initial amount of the investment, is known as:

• A) Unamortized carrying value.
• B) Annual net cash flows.
• C) Rate of return on investment.
• D) Net present value.
• E) Payback period.

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Definitions:

Surety-Guarantor Distinction

The difference lies in the obligations they undertake; a surety directly promises to be responsible for another's debt or performance, while a guarantor's liability arises if the primary obligor fails to perform.

State Statutes

Laws enacted by state legislatures that govern within the state's boundaries.

Mechanic's Lien

A legal claim against a property by a contractor or repair person for unpaid labor or materials.

Materialman's Lien

A legal claim against a property by a contractor, supplier, or worker for unpaid labor or materials provided for improving the property.