The Difference Between a Company's Assets and Its Liabilities, or Net

question 156

Multiple Choice

The difference between a company's assets and its liabilities, or net assets is:

• A) Net income.
• B) Expense.
• C) Equity.
• D) Revenue.
• E) Net loss.

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Definitions:

Discount Rate

The discount rate is the interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Salvage Value

The predicted remaining value of an asset at the termination of its functional life.

Working Capital

The amount by which current assets exceed current liabilities, indicating the liquidity level available to a business for day-to-day operations.

Salvage Value

The calculated resale value an asset holds once it ceases to be useful.