The ratio of the net cash receipts of the project divided by the cash outlays of the project, enabling trade-off analysis to be made between competing projects, is often referred to as:
A) return on investment (ROI).
B) break-even analysis (BEA).
C) net present value (NP
D) future value (FV).
E) Currency Rate Analysis (CRA).

Question

Quizplus · Accepted Answer

The ratio of the net cash receipts of the project divided by the cash outlays of the project is the formula for calculating return on investment (ROI). This enables trade-off analysis to be made between competing projects by comparing which project will generate a higher ROI. Options B) break-even analysis (BEA), C) net present value (NP), D) future value (FV), and E) Currency Rate Analysis (CRA) are all different financial analysis methods that may be used to make decisions regarding project selection, but they are not directly related to the ratio of net cash receipts to cash outlays.

The Ratio of the Net Cash Receipts of the Project