Which of the Following Is One of the Two Basic

question 41

Multiple Choice

Which of the following is one of the two basic criteria that makes a primary government financially accountable for a legally separate entity?

• A)The primary government's chief executive appoints three of the entity's trustees.
• B)The primary government appoints a voting majority of the entity's governing body.
• C)A department of the primary government can make grants to the entity.
• D)A department of the primary government is authorized to obtain and review the entity's financial statements.

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Definitions:

Required Return

The minimum expected return on an investment needed by an investor, factoring in the risk associated with the investment.

Initial Cash Outflow

Initial cash outflow refers to the amount of money a business or investor must spend upfront to initiate a project, investment, or acquisition.

Cash Inflows

The total amount of money being transferred into a business, typically from operational, investment, and financing activities.

Profitability Index

A calculation used to determine the relative profitability of an investment, defined as the present value of future cash flows divided by the initial investment cost.