The Accounting Rate of Return Is a Capital Investment Decision

question 52

True/False

The accounting rate of return is a capital investment decision model that does not provide for the inclusion of tax effects.

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Definitions:

NAV

Net Asset Value; the per share market value of a fund's assets minus its liabilities.

Equity Funds

Investment funds that predominantly hold stocks or equities in their portfolios.

Index Funds

Mutual funds or ETFs designed to replicate the performance of a specific market index, such as the S&P 500, by holding the same stocks in the same proportions.

Front-end Load

A charge or fee paid by an investor at the time of purchasing shares of a mutual fund or an investment, typically used to cover sales commissions.