The Length of Time Required for an Investment to Generate

question 57

Multiple Choice

The length of time required for an investment to generate cash flows sufficient to recover the initial cost of the investment is called the

• A)net present value.
• B)payback period.
• C)internal rate of return.
• D)profitability index.
• E)discounted cash period.

---

Definitions:

Break-Even Point

The point at which total revenues equal total expenses, meaning there is no profit or loss, and the business has covered all its costs.

Variable Cost

Charges that move in direct relationship with the quantity of goods produced or sold, embracing materials and labor expenses.

Units

Basic measures or quantities of product or service in business, used in accounting and production.

Least-Squares Regression Method

Least-Squares Regression Method is a statistical technique used to determine the line of best fit by minimizing the sum of the squares of the differences between the observed and predicted values.