Which One of the Following Should Be Used to Compare

question 53

Multiple Choice

Which one of the following should be used to compare the overall performance of three different investments?

• A)holding period dollar return
• B)capital gains yield
• C)dividend yield
• D)holding period percentage return
• E)effective annual return

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Definitions:

Allowance Method

An accounting technique used to estimate and account for bad debts or uncollectible accounts receivable.

Bad Debts

Accounts receivable that a company considers uncollectible and writes off as a loss in its financial statements.

Sales

The transactions involving the exchange of goods or services for money.

Accounts Receivable Turnover

A financial metric that measures how many times a business collects its average accounts receivable amount within a period, indicating the efficiency of credit and collections.