The Average Accounting Return

question 90

Multiple Choice

The average accounting return:

• A)measures profitability rather than cash flow.
• B)discounts all values to today's dollars.
• C)is expressed as a percentage of an investment's current market value.
• D)will equal the required return when the net present value equals zero.
• E)is used more often by CFOs than the internal rate of return.

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Definitions:

Management

The process by which corporate executives, managers, and other leaders direct, control, and organize work tasks and company resources to achieve specific goals.

Regulatory Environment

Comprises laws, regulations, and governmental guidelines that govern the operation of businesses and industries.