The Average Accounting Rate of Return (AAR)

question 100

Multiple Choice

The average accounting rate of return (AAR) : 

• A) considers the time value of money. 
• B) measures net income as a percentage of the sales generated by a project. 
• C) is the best method of financially analyzing mutually exclusive projects. 
• D) is the primary methodology used in analyzing independent projects. 
• E) is similar to the return on assets ratio. 

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Definitions:

Mean

The mean is a measure of central tendency that calculates the average value of a set of numbers by dividing the sum of those numbers by their quantity.

Z Score

A statistical measure that describes a value's relationship to the mean of a group of values, measured in terms of standard deviations from the mean.

Scores

Quantitative values assigned to individuals to represent or measure specific traits or outcomes.

Z Score

A metric that shows how far a value stands from the mean within a collection of values, denoted in units of standard deviations.