If a Company Has a Profit

question 25

Multiple Choice

If a company has a profit:

• A) Assets will be equal to liabilities plus equity.
• B) Assets will be less than liabilities plus equity.
• C) Assets will be greater than liabilities plus equity.
• D) Equity will be greater than its assets.

---

Definitions:

Annual Effective Rate

The interest rate that is adjusted for compounding over a given period, showing the real return on savings or cost of borrowing.

Nominal Rate

The interest rate or rate of return quoted on a loan or investment, not adjusted for inflation.

Compounding Intervals

The frequency with which interest is added to the principal balance of an investment, affecting the total interest earned over time.

Annuity Due

A type of annuity where payments are made at the beginning of each period, as opposed to the end, which is more common in regular annuities.