A Division Manager Is Considering a Project That Requires a Significant

A division manager is considering a project that requires a significant initial investment. If accepted, the project could have a negative impact on certain financial ratios that the company is required to maintain to satisfy bond contracts. The manager wants to ensure that the ratios will NOT be adversely affected by the investment. Which capital investment model should the manager use?

A) the payback period
B) the net present value
C) the internal rate of return
D) the accounting rate of return

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