Which of the Following Is a Capital Budgeting Method Used

question 26

Multiple Choice

Which of the following is a capital budgeting method used to screen potential investments?

• A) return on assets
• B) acid test ratio
• C) accounting rate of return
• D) debt-to-equity ratio

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Definitions:

Scrambled Merchandising

Selling goods and services that may be unrelated to each other and to the firm’s original business.

Corporate Chain

A series of businesses or retail outlets owned and operated by a single company.

Franchise Arrangement

A type of licensing arrangement where a franchisor allows a franchisee to use its business model and brand for a prescribed period.

Stout

A dark, thick beer with a distinctive malt flavor, originally associated with England.