An investment's average net income divided by its average book value deﬁnes the average:
A) Net present value.
B) Internal rate of return.
C) Accounting return.
D) Proﬁtability index.
E) Payback period.

Question

Quizplus · Accepted Answer

The calculation described in the question refers to the accounting return, which measures the profitability of an investment based on its accounting net income and book value. Choice A, B, D, and E are not relevant to this calculation.

An Investment's Average Net Income Divided by Its Average Book