Which of the Following Is an Advantage of the Accounting

question 158

Multiple Choice

Which of the following is an advantage of the accounting rate of return?

• A)It is easy to determine the time value of money used in the calculation.
• B)Accounting records are generally not based on cash flow, so the information for the calculation is readily available.
• C)Since depreciation is not included in the calculation, the result is not distorted.
• D)It uses actual profit amounts from previous accounting periods.

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Definitions:

Homemade Dividend

A strategy where investors create their own dividend policy by selling a portion of their portfolio.

Required Return

The minimum annual percentage earned by an investment that will entice individuals or companies to put money into a particular security or project.

Dividend

A portion of a company's earnings distributed to its shareholders, usually in cash or additional shares.

Dividend

A portion of a company's earnings distributed to its shareholders, usually in the form of cash or additional stock.