What Is the Net Return of an Investment

question 15

Multiple Choice

What is the net return of an investment?

• A) The total benefit from the investment asset
• B) The total improvements in the investor's life circumstances from the investment
• C) The difference between gross return and the operating and maintenance costs
• D) The difference between the gross return and the interest rate

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Definitions:

Working Capital Decision

Decision making related to managing a company's current assets and liabilities to ensure operational efficiency and financial stability.

Capital Budgeting

The process businesses use to evaluate potential major projects or investments, assessing the value they may add to the company.

Capital Intensity Ratio

A metric that measures the amount of capital needed per unit of output, indicating how capital-intensive a business is.

External Financing Needed (EFN)

The amount of financing required to balance both sides of the statement of financial position.