Accrual Accounting Rate of Return Is Calculated by Dividing Increase

question 146

True/False

Accrual accounting rate of return is calculated by dividing increase in expected average annual after-tax operating income by the net initial investment.

---

Definitions:

Demand Function

A mathematical relationship that illustrates the quantity of a product or service consumers are willing to buy at various prices.

Income

The compensation received, often periodically, as a result of one’s employment or investment decisions.

Price of X

The amount of money required to purchase a unit of good X in the market.

Utility Function

A mathematical model in economics that represents how different goods or outcomes give varying levels of satisfaction or happiness to an individual.