The capital budgeting method that divides a project's annual incremental net income by the initial investment is the:

A) internal rate of return method.
B) the net present value method.
C) the payback method.
D) the simple (or accounting) rate of return method.

Simple Rate Of Return

A metric used to evaluate the gain or loss on an investment relative to the amount invested, expressed as a percentage.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity level to meet short-term obligations and operations.

Annual Net Operating Cash Inflows

The total amount of money that flows into a business from its operational activities, after all operational expenses have been paid, over a one-year period.