Without Using Formulas, Provide a Definition of Average Accounting Return

question 275

Essay

Without using formulas, provide a definition of average accounting return (AAR).

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Definitions:

Investing Activities

Financial transactions related to the acquisition or sale of long-term assets and investments not considered cash equivalents.

Financing Activities

Transactions that involve raising capital and repaying investors, including issuing stock and paying dividends.

Land Purchase

This refers to the acquisition of land as an asset, representing the cost paid to obtain ownership of a land parcel.

Investing Section

Part of the cash flow statement that shows cash inflows and outflows related to investments in securities, property, plant, and equipment.