The Accounting Rate of Return Is Computed As: A

question 65

Short Answer

The accounting rate of return is computed as: a. Average annual income from the project divided by average annual investment.
B) Average annual income from the project divided by the length of time it takes to recoup the initial investment.
C) Average annual investment divided by the average annual income from the project.
D) Average annual investment divided by the length of time it takes to recoup the initial investment.
E) The initial cash outlay divided by the average annual income from the project.

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Definitions:

Manufacturing Overhead

Includes all the indirect costs associated with the production process, excluding direct materials and direct labor.

Assembly Division

A department or area within a manufacturing firm that is responsible for assembling the components of a product into a finished good.

Prorated

The allocation or division of amounts or costs proportionally according to a specific rate, size, or timeframe.

WIP

An acronym for Work In Progress, which refers to the materials and products that are in the process of being manufactured but are not yet complete.