What are the major shortcomings of using the Accounting Rate of Return (ARR) method as a capital

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What are the major shortcomings of using the Accounting Rate of Return (ARR) method as a capital budgeting method?

Capital Budgeting
Capital budgeting is a practice or method of analyzing investment decisions in capital expenditure, which is incurred at a point of time but benefits are yielded in future usually after one year or more, and incurred to obtain or improve the...
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Fundamentals of Corporate Finance

ISBN: 978-1119371403

4th edition

Authors: Robert Parrino, David S. Kidwell, Thomas Bates

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