Payback Method Measures

question 9

Multiple Choice

Payback method measures:

• A) how quickly a business repays bank financing.
• B) the frequency with which a supplier reimburses a business for increasing its purchases of merchandise.
• C) the number of years it takes for a capital investment to pay for itself.
• D) speed of repayment of a small business's founder's original cash investment.

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Definitions:

Share

A unit of ownership in a company or financial asset that gives the holder a claim on part of the company's assets and earnings.

Transfer Agent

An entity appointed by a corporation to maintain records of investors, account balances, and transactions; to issue and cancel shares; and to handle share transfers.

Financial Institution

An establishment that conducts financial transactions such as investments, loans, and deposits.

Stockholders

Individuals or entities that own shares in a corporation, thus having an ownership stake in the business.