In What Ways Are the Payback Period and Accounting Rate

question 211

Multiple Choice

In what ways are the Payback Period and Accounting Rate of Return methods of capital budgeting alike?

• A)They both ignore time value of money.
• B)They both focus on the time to recover the initial investment.
• C)They both focus on GAAP.
• D)They both measure the average profitability over the asset's life.

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