Question: 1. A strength of the average accounting return (AAR) method of project analysis is the fact that AAR: A. is easy to calculate. B. ignores

1. A strength of the average accounting return (AAR) method of project analysis is the fact that AAR:

A. is easy to calculate.

B. ignores the issue of taxes.

C. uses a cutoff rate.

D. is based on accounting values.

E. considers the time value of money.

2. Which one of these statements related to discounted payback is correct?

A. Payback is a better method of analysis than discounted payback.

B. Discounted payback does not require a cutoff point.

C. Discounted payback is biased towards short-term projects.

D. The discounted payback period increases as the discount rate decreases.

E. Discounted payback is used more frequently in business than payback.

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