Which of the Following Is Considered to Be a Redeeming

question 131

Multiple Choice

Which of the following is considered to be a redeeming feature of average accounting return analysis?

• A) It incorporates time value of money.
• B) Estimation of the appropriate cutoff rate is straightforward and easy.
• C) Calculation relies on net income and not cash flows or asset values.
• D) Calculation relies on book values and not market values or cash flows.
• E) It is relatively easy to calculate.

---

Definitions:

Property Rights

Legal rights to possess, use, and dispose of assets.

Market Prices

The current price at which goods and services can be bought or sold in a market, determined by supply and demand.

Mutually Agreeable Prices

Prices that are accepted by both buyers and sellers in a transaction, usually determined through negotiation or market dynamics.

Competition

The economic rivalry among businesses or individuals within a market, aiming to achieve higher sales, profits, and market share.