What Are Two Tradeoffs Between Ideal Standards and Practical Standards

question 117

Essay

What are two tradeoffs between ideal standards and practical standards that a student might be willing to accept for a Principles of Accounting class?

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Definitions:

Required Rate of Return

The least percentage of yearly return needed to entice entities or individuals to invest in a particular project or security.

Average IRR

The mean internal rate of return, calculating the average profitability of investments or projects over time.

Pre-Tax Cost

The expense incurred by an organization or individual before taxes have been deducted.

After-Tax Cost of Capital

The net cost of capital to a company after accounting for the tax benefits associated with debt financing.