Since the average accounting return (AAR) method of project analysis _____________, it is considered as the method's strength.

• ignores the issue of taxes
• uses a cutoff rate
• considers the time value of money
• is easy to calculate
• is based on accounting values

Pick the correct statement related to average accounting rate of return (AAR) from below.

• The average accounting rate of return considers the time value of money.
• The average accounting rate of return measures net income as a percentage of the sales generated by a project.
• The average accounting rate of return is the best method of financially analyzing mutually exclusive projects.
• The average accounting rate of return is the primary methodology used in analyzing independent projects.

The average accounting rate of return is similar to the return on assets ratio.