Which of the Following Is Not a Characteristic of Debt

question 23

Multiple Choice

Which of the following is not a characteristic of debt?

• A)It may make it possible to balance the peaks and valleys in one's spending pattern.
• B)It does not help one even out life cycle style needs.
• C)It allows an outlay for a significant capital expenditure.
• D)All of the above are characteristics of debt.
• E)None of the above are characteristics of debt.

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Definitions:

Capital Budgeting

The process of planning and evaluating investments in long-term assets, focusing on projects that will generate future profits.

Required Rate

Typically refers to the minimum return rate needed on an investment, considering risk and funding costs.

Screening Decision

A decision as to whether a proposed investment project is acceptable.

Salvage Value

The projected remaining worth of an asset after its lifespan has ended.