An Investment Is Acceptable If Its Average Accounting Return (AAR)

question 303

Multiple Choice

An investment is acceptable if its average accounting return (AAR) :

• A) Is less than a target AAR.
• B) Exceeds a target AAR.
• C) Exceeds the firm's return on equity (ROE).
• D) Is less than the firm's return on assets (ROA).
• E) Is equal to zero and only when it is equal to zero.

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Definitions:

Algorithm

A methodical, logical rule or procedure that guarantees solving a particular problem. Contrasts with the usually speedier—but also more error-prone—use of heuristics.

Chess-Playing

The act of engaging in chess, a strategic and intellectual board game that requires players to move pieces on a square board according to specific rules.

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Calculating outcomes refers to the process of making predictions or determining the potential results of specific actions or decisions.

Prototype

An original model or initial design from which other forms are copied or developed, often used in the context of inventions or the development phase of products.