Which of the Following Statements Concerning the Return on Average

question 38

Multiple Choice

Which of the following statements concerning the return on average investment method of capital budgeting is incorrect?

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

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Definitions:

Hang-gliding

A recreational activity or sport where a person flies a light, non-motorized aircraft which is launched by leaping from a height.

Responsible

Being accountable or answerable for something within one’s power, control, or management.

Title Search

The process of examining public records to verify the legal ownership of property and determine if there are any claims or liens against it.

Standard of Care

The level of carefulness and caution expected from someone who has a responsibility to act carefully.