The Payback Period Is Determined Using Which of the Following

question 3

Multiple Choice

The payback period is determined using which of the following formulas?

• A)Amount to be invested/Annual average net income
• B)Annual net cash flow/Amount to be invested
• C)Annual average net income/Amount to be invested
• D)Amount to be invested/Equal annual net cash flows

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Definitions:

Trial Balance

A bookkeeping report that lists the balances of all ledgers in two columns, debits and credits, ensuring that total debits equal total credits.

Debit

An accounting entry that increases asset or expense accounts, or decreases liability, equity, or revenue accounts.

Credit

An accounting entry on the right side of an account ledger, recording increases in liabilities, equity, and revenue, or decreases in assets and expenses.

Recording Process

The act of documenting financial transactions systematically in the books of accounts of a business.