The Accounting Rate of Return Method Focuses On

question 39

Multiple Choice

The accounting rate of return method focuses on:

• A) total accounting profit, which is based on accrual accounting procedures.
• B) the incremental accounting profit that results from a project.
• C) cash inflows from the project.
• D) tax savings from a project.

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Definitions:

Common Stock

Shares of ownership in a corporation, giving holders voting rights and a claim on profits in the form of dividends.

Capital Stock

The total amount of a company's capital, represented by the shares of its stock.

Commission Charges

Commission charges are fees paid for services, particularly in the fields of finance and real estate, calculated as a percentage of the transaction value.

Dollar Amount

The value of something measured in units of currency, specifically U.S. dollars.