Jayson and MaryElise Enter into a Contract

question 20

Multiple Choice

Jayson and MaryElise enter into a contract.Jayson agrees to mow MaryElise's yard every week for the summer.MaryElise is the

• A)obligor.
• B)obligee.
• C)assignee.
• D)assignor.

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Definitions:

Cost of Capital

The critical rate of return a firm is required to earn on investment projects to hold its market stance and entice financiers.

NPV Method

Net Present Value method, a financial analysis tool used to determine the value of an investment by discounting future cash flows to their present value.

IRR Method

The IRR method, or Internal Rate of Return method, is a financial analysis tool used to evaluate the profitability of an investment by calculating the interest rate at which net present value of all the cash flows (both positive and negative) from a project or investment equals zero.

Cost of Capital

The rate of return required by a company to undertake an investment or project, often used as a discount rate in capital budgeting.