An Example of a Denominator Reason for Calculating Annual Indirect-Cost

question 85

Multiple Choice

An example of a denominator reason for calculating annual indirect-cost rates includes ________.

• A) higher heating bills in the winter
• B) semi-annual insurance payments in March and September
• C) higher levels of output demanded during the fall months
• D) All of these answers are correct.

---

Definitions:

Low Default Risk

A classification for bonds or other forms of debt that are deemed to have a minimal chance of the issuer failing to make the required payments.

Money Market

The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities are traded, intended for short-term borrowing and lending.

Transaction Motive

The need to hold cash to satisfy normal disbursement and collection activities associated with a firm’s ongoing operations.

Liquidity

Measures the ease with which an asset can be converted into cash without significantly affecting its price.