Accrual Accounting Rate of Return Method MCQ (Multiple Choice Questions) PDF Download

If the net initial investment is $985000, returned working capital is $7500, then an average investment over five years will be

1. $596,300
2. $485,300
3. $496,250
4. $486,250

The categories of cash flows include

1. net initial investment
2. cash flow from operations after paying taxes
3. cash flow from terminal disposal after paying taxes
4. all of above

The sum of returned working capital and net initial investment is divided by 2 to calculate

1. increase in operating income
2. average investment over five years
3. average capital invested
4. average rate of return

Annual earned income is divided from a project by capital invested to calculate

1. accrual accounting rate of return
2. returned working capital
3. increase in expected average annual
4. decrease in expected average annual

The working capital cash outflow, cash outflow to buy machine and cash inflow from machine are the examples of

1. cash flow from operations
2. terminal disposal of investment
3. net initial investment
4. average return on investment