Which One of the Following Is an Advantage of the Accounting

question 61

Multiple Choice

Which one of the following is an advantage of the accounting (book) rate of return (ARR) method for analyzing capital investment proposals?

• A) It is not affected by different accounting methods.
• B) It is precise and objective.
• C) Data for calculating the return are typically readily available.
• D) The method explicitly adjusts for the time value of money.
• E) ARR is generally approximately equal to a project's internal rate of return (IRR).

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Definitions:

Equilibrium Quantity

The quantity of goods supplied that is equal to the quantity demanded at the market equilibrium price.

Equilibrium Price

The market price at which the supply of an item matches its demand, leading to economic stability in the market.

Supply Curve

An illustrative diagram depicting the link between the cost of an item and the volume merchants are ready to provide.

Supply Curve

A graphical representation showing the correlation between the price of a good or service and the amount that suppliers are willing to produce and sell at each price level.