The Accounting Rate of Return Is Calculated by Dividing the Project's

question 5

True/False

The accounting rate of return is calculated by dividing the project's investment by its net income.

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Definitions:

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.

Investment Turnover

A ratio that measures the efficiency of a company in generating sales or revenues from its investment in assets.

Invested Assets

Invested assets refer to resources or capital that have been allocated to investments, including stocks, bonds, real estate, or other financial assets, aimed at generating future returns.

Sales

How revenue from the sale of merchandise is recorded; the total amount charged customers for merchandise sold, including cash sales and sales on account.