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.

Answer rating: 100% (QA)

Average Accounting return Average Annual ProfitInvestment Hence it is very simple to calcul... View the full answer