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a project's average net income divided by its average book value is referred to as the project's average: multiple choice payback period. internal rate of return.

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The correct term for a project's average net income divided by its average book value is the 'accounting return,' also known as return on investment or return on assets, reflecting actual profitability after the fact.

  • A project's average net income divided by its average book value is referred to as the project's accounting return.
  • The accounting return is also known as the return on investment (ROI) or the return on assets (ROA).
  • It is the ratio that represents the profitability of an investment relative to its cost.
  • The expected rate of return is a crucial concept in finance, referring to the potential profit an investor might receive from an investment, whether it be through interest, dividends, or capital gains.
  • The accounting return, however, is a backward-looking metric, reflecting the actual profitability of a project after it has occurred based on the investment's book value rather than its market value or the cost of capital.

Question:

A project average net income divided by its average book value is referred to as the projects average:

Net present value

Internal rate of return

Accounting return

Profitability index

Payback period

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