How Does Depreciation Affect the Calculation of a Project's Accounting

question 3

Multiple Choice

How does depreciation affect the calculation of a project's accounting rate of return (ARR) ?

• A)Depreciation is added to the annual cash inflows.
• B)Depreciation is deducted from the annual cash inflows.
• C)Depreciation does not affect ARR.
• D)Depreciation is only deducted if the ARR is less than the minimum required rate of return.

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Definitions:

Counterconditioning

A behavior therapy technique where a maladaptive response to a stimulus is replaced with a more adaptive one, often used in treating phobias.

Behavior Modification

The use of learning techniques, such as reinforcement or punishment, to change or modify behavior.

Reciprocal Inhibition

A psychological principle where the existence of one emotional or behavioral state can suppress the occurrence of another, such as anxiety being reduced by relaxation.

Self-control Procedures

Techniques or strategies used to modify one's own behavior, typically aimed at achieving personal goals or overcoming undesirable habits.