The Average Accounting Rate of Return Is Determined By

question 34

Multiple Choice

The average accounting rate of return is determined by:

• A) dividing the yearly cashflows by the investment.
• B) dividing the average cashflows by the investment.
• C) dividing the average net income by the average investment.
• D) dividing the average net income by the initial investment.
• E) dividing the net income by the cashflow.

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Definitions:

Bar Graph

A chart or graphical representation of data, typically used to compare amounts or values across different categories, using bars of different lengths.

Vertical Bars

A graphical representation used in charts and graphs to show quantities with upright rectangles, whose heights are proportional to the values they represent.

Comparative Sizes

A term used to compare the dimensions or magnitudes of different entities or objects, often in a relative context.

Omitted Variable

An unobserved variable that, through its influence on other variables, creates the erroneous appearance of a direct causal relationship among those variables.