The Accounting Rate of Return Calculations Ignores the Time Value

question 49

True/False

The accounting rate of return calculations ignores the time value of money,but the payback period does include consideration of the time value of money.

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Definitions:

Defensive Attribution

A psychological process by which individuals tend to ascribe fewer vulnerabilities to themselves than to others to avoid feeling vulnerable to misfortunes.

Cognitive Dissonance

A state of psychological discomfort caused by holding two conflicting beliefs, values, or attitudes.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses, while giving disproportionately less consideration to alternative possibilities.

Fundamental Attribution Error

The tendency to overemphasize personal traits and minimize situational factors as causes of other people's behavior.