Which One of the Following Methods of Analysis Has the Greatest

question 9

Multiple Choice

Which one of the following methods of analysis has the greatest bias toward short-term projects?

• A)Net present value
• B)Internal rate of return
• C)Average accounting return
• D)Profitability index
• E)Payback

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Definitions:

Debt-to-Total-Assets Ratio

A financial ratio that indicates the proportion of a company’s assets that are financed by debt, used to assess financial leverage and risk.

Capital Structure

The mix of different types of debt and equity that a company uses to finance its overall operations and growth.

ROA

Return on Assets, a financial ratio indicating how profitable a company is relative to its total assets.

Net Income

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