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:

GAAP

Generally Accepted Accounting Principles; a collection of commonly-followed accounting rules and standards for financial reporting.

Grant Date

In the context of stock options, the grant date is the date on which an employee is given the right to exercise their options at a set price.

Common Stock

represents units of ownership in a corporation, giving shareholders voting rights and a share in the company’s profits through dividends.

Market Value

The current quoted price at which an asset or service can be bought or sold in a marketplace.