Which of the Following Is TRUE of a Corporation

question 104

Multiple Choice

Which of the following is TRUE of a corporation?

• A) A corporation cannot be privately held.
• B) The earnings of a corporation may be subject to double taxation.
• C) A corporation has a limited life.
• D) The stockholders of a corporation have unlimited liability for the corporation's debt.

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Definitions:

Projected Annual Cash Inflow

An estimate of the total money expected to be received by a company over a year from its operational activities.

Net Present Value

Net present value (NPV) is a financial calculation used to assess the profitability of an investment or project, by discounting all expected future cash flows to their present value using a specific discount rate.

Payback Period

The time it takes for an investment to generate enough cash flow to recover its initial cost, used in capital budgeting to evaluate investment efficiency.

Straight-Line Depreciation

A plan for breaking down the expense of a real asset across its viable life in steady annual segments.