An Assessment Method Widely Used in Practice Which Enables Managers

question 54

Multiple Choice

An assessment method widely used in practice which enables managers to screen investment projects to determine which projects can recoup their investment outlay the fastest,is the:

• A) internal rate of return method.
• B) accounting rate of return method.
• C) payback method.
• D) net present value method.

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Definitions:

Mode

The value that appears most frequently in a data set, a measure of central tendency.

Proportion of Weights

The ratio of an individual weight to the total weight of all items combined, often used in statistical calculations to determine relative importance.

Tchebysheff's Theorem

A statistical rule stating that for any set of data, no matter the distribution, a certain proportion of values will fall within a specified number of standard deviations from the mean.

Empirical Rule

A statistical rule stating that for a normal distribution, nearly all of the data will fall within three standard deviations of the mean.