Yvon Enters into a Contract to Manage the Operations of Zack's

question 45

Multiple Choice

Yvon enters into a contract to manage the operations of Zack's bank for one year, renewable for subsequent one-year terms. If this contract is discharged like most contracts, it will be

• A) canceled.
• B) delegated.
• C) litigated.
• D) performed.

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Definitions:

Payback Method

A capital budgeting technique that calculates the time required to recoup the initial investment through cash inflows.

Accounting Rate

Often refers to the accounting rate of return (ARR), a financial ratio used to measure the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.

Investment Allowance

A tax benefit that allows businesses to deduct a percentage of certain capital expenditures from their taxable income.

Tax Deduction

Expenses subtracted from gross income to determine taxable income, which can reduce the amount of tax owed.