Select the Incorrect Statement Concerning the Return on Average Investment

question 17

Multiple Choice

Select the incorrect statement concerning the return on average investment method of capital budgeting.

• A) It measures profit in the same way as the income statement.
• B) It is easy to use.
• C) It distinguishes between investments requiring an immediate payment of cash and those where payment is in the future.
• D) It considers profits over the useful life of the investment.

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Definitions:

Cause-and-Effect Models

Analytical tools or diagrams used to identify and represent the relationships between various factors and the outcomes they produce.

Independent Variables

Variables in an experiment or mathematical model that are manipulated to determine their effect on dependent variables.

Dependent Variables

Variables in a study or experiment that are expected to change as a result of changes in other variables.

HR Concept

Pertains to the ideas and strategies associated with Human Resources, including recruitment, management, and development of a company's workforce.