An Arrangement Through Which One Transfers Property to a Third

question 20

Multiple Choice

An arrangement through which one transfers property to a third party with instructions for its distribution after death while retaining control over the property during his or her life is called a

• A) will
• B) gift
• C) trust
• D) joint tenancy with right of survivorship
• E) codicil

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Definitions:

NPV

Net Present Value; a financial metric used to evaluate the profitability of an investment, calculated by subtracting the initial investment from the present value of cash inflows.

AAR

Average Annual Return; calculating the mean annual return of an investment over a specified time period.

Discounted Payback

An investment appraisal method that calculates the time required to break even in present value terms, factoring in the time value of money.

Operating Cash Flow

The cash generated from the normal operating activities of a business in a specific time period.