The Everest Company Has Income from Operations of $80,000, Invested

question 156

Multiple Choice

The Everest Company has income from operations of $80,000, invested assets of $500,000, and sales of $1,050,000. What is the investment turnover?

• A) 1.8
• B) 2.1
• C) .48
• D) 13.13

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Definitions:

Payback Method

A capital budgeting technique that calculates the time required to recoup the cost of an investment, focusing on cash flows rather than profitability or cost of capital.

Bias Towards Liquidity

A preference or inclination for holding or investing in liquid assets, usually due to concerns about future cash needs or market volatility.

Project Analysis

The process of evaluating the financial and operational implications of a proposed project or investment to determine its viability and expected returns.

Net Present Value

An economic indicator for assessing an investment's gainfulness, which involves the deduction of the present value of cash expenditures from the present value of cash receipts over a certain period.