Operating income divided by sales is _____.

a. financial leverage

b. return on stockholders' equity

c. profit margin

d. asset turnover

When annual net cash inflows are equal, the cash payback period is computed as:

a. Annual net cash inflow Depreciation per year.

b. Annual net cash inflow Life of investment.

c. (Initial cost Annual net cash inflow) Life of investment.

d. Initial cost Annual net cash inflow.

Average rate of return is computed as:

a. Estimated average annual income Average investment.

b. (Average investment Residual value) Life of investment.

c. Estimated average annual income Life of investment.

d. (Initial cost of investment + Residual value) 2.