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Simple Rate of Return Method in Capital Budgeting

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

What is an assumption of the simple rate of return method?

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1. What does a company need to calculate a simple rate of return?

2. What is the simple rate of return method?

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About This Quiz & Worksheet

This quiz will test you on your knowledge of the simple rate of return method. You will be asked about several vocabulary terms related to this concept and answer general questions about this method.

Quiz & Worksheet Goals

The goals of this quiz are to see how much you know about:

  • An assumption that the simple rate of return method makes
  • Requirements for a company to utilize a simple rate of return
  • The simple rate of return method
  • Capital investment

Skills Practiced

This quiz will allow you to practice the following skills:

  • Reading comprehension - ensure that you draw the most important information from the related business lesson
  • Defining key concepts- ensure that you can accurately define main phrases, such as capital investment and simple rate of return
  • Knowledge application - use your knowledge to answer a question about what is needed to use a simple rate of return

Additional Learning

If you would like to learn more about this topic, look over our lesson entitled Simple Rate of Return Method in Capital Budgeting. This short lesson will teach you about:

  • Calculating simple rate of return to measure practicality
  • Using simple rate of return in planning strategies
  • The disadvantages of using a simple rate of return
  • Capital investments relationship to the simple rate of return
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