The Accounting Rate of Return Focuses on The

question 92

Multiple Choice

The accounting rate of return focuses on the:

• A) total accounting income over a project's life.
• B) average accounting income over a project's life.
• C) average cash flows over a project's life.
• D) cash inflows from a project.
• E) tax savings from a project.

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Definitions:

Controlling Interest

An ownership interest in a business entity in terms of voting rights, sufficient to control the policies and management of the entity.

Fiduciary Duty

An obligation to act in the best interest of another party, for example, a company's management acting in the best interests of its shareholders.

Management

The process of dealing with or controlling things or people, often within an organization or a project, including planning, organizing, leading, and controlling resources.

Subsidiary

A company that is controlled by another company, known as the parent company, through ownership of a majority of its voting stock.