The Payback Period and the Accounting Rate of Return Are

question 160

Essay

The payback period and the accounting rate of return are two methods of evaluating capital budgeting decisions.Like other approaches, these two methods have advantages and disadvantages.
Required:
a.What is an advantage of these two methods?
b.List two disadvantages of the payback period and explain how to calculate the payback period.
c.List two advantages and two disadvantages of the accounting rate of return and explain how to calculate the return.

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Definitions:

Synovial Membrane

A specialized connective tissue that lines the inner surface of capsules of synovial joints and secretes synovial fluid.

Articular Cartilage

A sleek, pale material enveloping bone tips where they meet to create joints, lessening friction and mitigating shock.

Fibrous Capsule

A type of dense connective tissue that encloses organs and joints, providing support and protection.

Lyme Disease

A bacterial infection transmitted by ticks, characterized by a skin rash, fever, and fatigue, potentially leading to chronic symptoms.