What is the capital budgeting method that divides a project's annual incremental net income by the initial investment?
A) The internal rate of return method.
B) The simple (or accounting)rate of return method.
C) The payback method.
D) The net present value methoD.

Question

Quizplus · Accepted Answer

The capital budgeting method that divides a project's annual incremental net income by the initial investment is known as the simple (or accounting) rate of return method. This method is easy to understand and calculate, but it does not take into account the time value of money or the cash flows beyond the initial investment period. Therefore, it is not considered the best choice for making investment decisions.

What Is the Capital Budgeting Method That Divides a Project's