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:

Relational

Pertaining to the way in which two or more concepts, objects, or people are connected, especially in a personal or social context.

Relational

Pertaining to or concerning the way in which two or more concepts, objects, or people are connected.

Prospective

Relating to or effective in the future; oriented towards potential developments or occurrences.

Retrospective

An analysis or review of past events, aimed at gaining insights or understanding for future improvements.