The Investment Decision Rule That Relates Average Net Income to Average

question 45

Multiple Choice

The investment decision rule that relates average net income to average investment is the:

• A) discounted cash flow rule.
• B) average accounting rate of return method.
• C) average payback rule.
• D) average profitability index.

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Definitions:

Business Ownership

Business Ownership refers to the legal possession of a business, which includes the right to control its operations and profit from its activities.

Sole Proprietorship

A business structure where a single individual both owns and runs the company, bearing unlimited liability for its debts.

Limited Liability Company

A corporate framework that merges the direct taxation benefit of partnerships or sole proprietorships with the corporation's advantage of limited liability.

Corporation

A legal entity that is separate from its owners, offering limited liability to its shareholders, and is able to own assets, incur liabilities, and enter into contracts.