The Average Accounting Return (AAR) Rule Can Be Best Stated

question 381

Multiple Choice

The average accounting return (AAR) rule can be best stated as:

• A) An investment is acceptable if its AAR is less than a target AAR.
• B) An investment is acceptable if its AAR exceeds a target AAR.
• C) An investment is acceptable if its AAR exceeds the firm's return on equity (ROE).
• D) An investment is acceptable if its AAR is less than the firm's return on assets (ROA).

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Definitions:

Mission

A statement or purpose that outlines an organization's reason for being, its core objectives, and how it seeks to achieve its goals.