Sharing cash flow in a joint venture in proportion to the capital contribution is referred to as:
A)Pari passu
B)Equal sharing
C)Preferred return
D)Equity sharing

Question

Quizplus · Accepted Answer

Pari passu is a Latin phrase meaning "with an equal step" or "on equal footing." It is used in finance to indicate that various parties have equal rights or claims to something, such as sharing cash flows or profits in proportion to their contributions or investments. This concept is often applied in joint ventures where partners agree to share profits and losses in proportion to their respective capital contributions.

Sharing Cash Flow in a Joint Venture in Proportion to the Capital