The Decision Technique That Measures the Estimated Performance of a Capital

question 57

Multiple Choice

The decision technique that measures the estimated performance of a capital investment by dividing the project's annual after-tax income by the average investment cost is called the:

• A) Break-even point for the project.
• B) Internal rate of return (IRR) on the proposed investment.
• C) Accounting (book) rate of return (ARR) on the investment.
• D) Capital asset pricing rate of return.
• E) Profitability index (PI) for the investment.