Which One of the Following Is Calculated by Dividing Average

question 44

Multiple Choice

Which one of the following is calculated by dividing average annual net operating income of a proposed project by the average investment associated with the project?

• A) Profitability index (PI).
• B) Payback period.
• C) Accounting (book) rate of return (ARR).
• D) Internal rate of return (IRR).
• E) Net present value (NPV).

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Definitions:

Negative Predictive Value

is the proportion of negative test results that are truly negative, indicating how well a test identifies individuals who do not have a disease.

High Sensitivity

The capability of an assessment to accurately detect individuals who have the disease (true positive rate).

Low Specificity

A characteristic of a diagnostic test that indicates a high likelihood of false positives, meaning it often indicates a disease or condition is present when it is not.

Sensitivity

The ability of a test to correctly identify those with the disease (true positive rate).