What Is Investment Made by an Individual, Partnership, or Corporation

question 16

Multiple Choice

What is investment made by an individual, partnership, or corporation in return for some form of ownership in a venture called?

• A) Debt capital
• B) Founders' capital
• C) Sweat equity
• D) Equity capital

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Definitions:

Acid-Test Ratio

A financial ratio indicating a firm's capacity to settle short-term debts without having to sell its stock.

Marketable Securities

Financial instruments that can be easily converted to cash, such as stocks, bonds, and Treasury bills.

Earnings Per Share

A metric used to measure a company’s profitability, calculated as the company's net profit divided by the number of outstanding shares.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenues.