List Two Strengths and One Weakness of the Accounting Rate

question 143

Essay

List two strengths and one weakness of the accounting rate of return capital budgeting method.

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Definitions:

Herfindahl Index

A measure used to calculate the size of firms in relation to the industry and an indicator of the amount of competition among them; higher values indicate lesser competition.

Concentration Ratio

A measure used in economics to assess the level of competition in an industry by calculating the market share of the largest firms.

Internet Search Industry

A sector of the economy that involves companies which provide technologies and services for searching information on the Internet.

Product Differentiation

The process of distinguishing a product or service from others in the market to make it more attractive to a targeted audience.