The Accounting Rate of Return Method Focuses on Operating Income

question 126

True/False

The accounting rate of return method focuses on operating income instead of net cash inflow generated by an asset.

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Definitions:

Machine Disposal

Machine disposal involves the process of removing, selling, or discarding machinery and equipment that is no longer needed, useful, or functional for a business.

Rate Of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's cost.

Luxury Bus

A high-end, comfortable bus service designed for long distances with superior amenities.

Equal End-of-year Amounts

Represents the consistent annual payments made or received over the life of a financial instrument, often associated with loans or investments.