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What Is the Reasoning or Logic Behind Using the Average

question 135

Essay

What is the reasoning or logic behind using the average accounting return since it does not provide
pure financial analysis?


Definitions:

Asset Retirement Obligations

Legal obligations associated with the retirement of a tangible long-lived asset that a company must settle.

Expected Present Value

A financial metric that estimates the present value of future cash flows, adjusted for risk, and the time value of money.

Outflows

Cash or other resources going out of an entity, typically associated with expenses or investments.

Accelerated Depreciation

A depreciation method that expenses asset cost more rapidly in the initial period of its life.

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