The payback period:

Multiple Choice

• Is the length of time necessary to recover the entire cost of an investment from its resulting annual net cash flow.

• Is the length of time necessary to recover the entire cost of an investment from its resulting annual net income.

• Takes into consideration the profitability of an investment over its entire life, but ignores the timing of its future cash flows.

• Takes into consideration both the profitability of an investment over its entire life and the timing of its future cash flows.

The present value of money is always:

Multiple Choice

• Less than its future amount.

• The same as its future amount.

• More than its future amount.

• More or less than its future amount depending upon the discount rate.

To compute a future amount from a present value, we need to know:

Multiple Choice

• The future value and length of time.

• The interest rate and length of time.

• The future annuity amount.

• The present annuity amount.

Which of the following accounting system characteristics cannot generate motivation?

Multiple Choice

• Creating and setting goals

• Measuring progress towards those goals

• Allocating rewards towards goal achievement

• Balancing debits and credits

The Parry Company provided the following information regarding its operations:

	End of Year 1	End of Year 2
Total assets	$ 41,000,000	$ 46,000,000

	Year 1	Year 2
Net operating income	$ 866,000	$ 916,000
Net sales	2,075,000	2,650,000

What is Parry's ROI for Year 2? (Round your answer to 2 decimal places.)

Multiple Choice

• 1.99%

• 3.88%

• 2.11%

• 3.67%