The Shortcoming(s) of the Average Accounting Return (AAR) Method Is

question 100

Multiple Choice

The shortcoming(s) of the average accounting return (AAR) method is (are) :

• A)the use of net income instead of cash flows.
• B)the pattern of income flows has no impact on the AAR.
• C)there is no clear-cut decision rule.
• D)All of the above.
• E)None of the above.

---

Definitions:

Financial Stability

The condition in which an organization or individual has a strong financial foundation, characterized by solvency, adequate liquidity, and low levels of debt, enabling endurance through economic fluctuations.

Viability

The ability of a project, idea, or entity to work successfully and sustainably.

Life Cycles

The series of changes in the life of an organism or product, including birth or inception, growth, maturity, and decline or death.

Entrepreneurships

The act of creating, designing, and running new businesses, often characterized by risk-taking and innovation, in pursuit of opportunity and profit.