When Several Alternative Investment Proposals of the Same Amount Are

question 177

Multiple Choice

When several alternative investment proposals of the same amount are being considered, the one with the largest net present value is the most desirable. If the alternative proposals involve different amounts of investment, it is useful to prepare a relative ranking of the proposals by using a(n) :

• A) average rate of return
• B) consumer price index
• C) present value index
• D) price-level index

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Definitions:

Actual Authority

The express and implied powers given to an agent by a principal, allowing the agent to make legally binding decisions.

Principle Of Estoppel

A legal doctrine preventing an individual or entity from making assertions or from going back on their word where actions or declarations have been made that others have relied upon.

Agency Relationship

A legal arrangement where one party, the agent, is authorized to act on behalf of another, the principal, in business transactions.

Establish A Partnership

The process of creating a partnership, which involves two or more individuals agree to share the profits and losses of a business endeavor.