When Comparing the Payback Method and the Accounting Rate of Return

question 91

Multiple Choice

When comparing the payback method and the accounting rate of return methods, which of the following is true?

• A) IV
• B) III
• C) II
• D) I

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Definitions:

Outputs

The goods or services produced by a company or an economy over a certain period of time.

Increasing Opportunity Costs

A principle stating that as the production of a good increases, the opportunity cost of producing an additional unit of this good also increases.

Bowed-Out Shape

Describes a concave production possibilities frontier that reflects increasing opportunity costs as production of one good is increased.

Attainable And Unattainable

Describes whether a certain state or outcome can be achieved with the available resources (attainable) or not (unattainable), often used in the context of production and economics.