Rank These Investments in Order of Payback Period Showing the Best

question 35

Multiple Choice

Rank these investments in order of payback period showing the best project first.
$\bullet$ Investment A - 4.2 years
$\bullet$ Investment B - 2.8 years
$\bullet$ Investment C - 3 years
$\bullet$ Investment D - 5.1 years

• A) B, C, A, D
• B) A, C, B, D
• C) B, A, D, C
• D) D, A, C, B

---

Definitions:

Debt-To-Equity Ratio

An evaluation measuring how shareholder equity contrasts with debt in the economic arrangement to finance a company's assets.

Equity Multiplier

A ratio of financial leverage which quantifies the fraction of a company's assets funded by the equity of its shareholders.

Net Profit Margin

A financial ratio that shows the percentage of net income to revenue, indicating the efficiency at which a company converts sales into net profit.

Gross Margin

The difference between the sales revenue and the cost of goods sold, indicating the profitability of a company's core business activities.