The Average Accounting Return

question 90

Multiple Choice

The average accounting return:

• A)measures profitability rather than cash flow.
• B)discounts all values to today's dollars.
• C)is expressed as a percentage of an investment's current market value.
• D)will equal the required return when the net present value equals zero.
• E)is used more often by CFOs than the internal rate of return.

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Definitions:

Ecologic Fallacy

The error in reasoning that occurs when conclusions about individual-level processes are drawn from group-level data.

Median Household Income

The middle income value where half of the households in a geographical area earn more and half earn less, used as a standard measure of economic well-being.

Teen Pregnancy

Pregnancy occurring in young women under the age of 20, which carries unique health risks and socio-economic implications for the teen and her child.

Multiple Controls

In experimental research, refers to the use of two or more control groups to compare against the experimental group, enhancing the validity of the results.