What Investment Decision Method Takes the Average Profit and Expresses

question 51

Multiple Choice

What investment decision method takes the average profit and expresses it as a percentage of the average investment?

• A)Accounting rate of return
• B)Net present value
• C)Payback period
• D)Internal rate of return

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Definitions:

Creditor

An entity (could be a person, organization, government body) to whom money is owed by the debtor for providing a loan, goods, or services on credit.

Bank Memos

Notices from a bank that make adjustments to a company's bank account balance, often for fees, interest payments, or corrections.

Bank Reconciliation

The analysis that details the items responsible for the difference between the cash balance reported on the bank statement and the balance of the cash account in the ledger.

Company's Accounts

Records that contain the financial transactions, assets, liabilities, and equity of a company.