If the Accounting Rate of Return Exceeds the Required Accounting

question 152

Multiple Choice

If the accounting rate of return exceeds the required accounting rate of return,

• A)invest in the capital asset.
• B)do not invest in the capital asset.
• C)only invest if the payback period is also greater than the required rate of return.
• D)only invest if the payback period is also less than the required rate of return.

---

Definitions:

Company Tax Rate

The percentage of a company's taxable income that it must pay to the government as tax, varying across jurisdictions and influenced by specific tax laws and regulations.

Intragroup Sale

Transactions involving the exchange of goods or services between entities within the same group of companies.

Consolidation Worksheet

A tool used in accounting to merge the financial statements of a parent company and its subsidiaries.

Inventories

Resources allocated for trading within normal business practices, including those being prepared for sale or as materials and supplies meant for depletion during production or in service rendering.