Net Present Value Method and Accounting Rate of Return Method

question 15

True/False

Net present value method and accounting rate of return method are the two important decision variables used in the evaluation of proposals.

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Definitions:

Ownership

The state or fact of owning something, which includes the rights to use, sell, or receive income from it.

Deferred Income Tax Asset

A financial item on the balance sheet that results from over-payment or advance payment of taxes, which is expected to be recovered in future periods.

Income Tax Returns

Official documents filed with governmental tax authorities declaring income, expenses, and other tax-relevant information to calculate tax liability.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary depending on income level, type of income, or jurisdiction.