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Homework answers / question archive / In computing the accounting rate of return, the ____ level of investment should be used as the denominator
In computing the accounting rate of return, the ____ level of investment should be used as the denominator.
A. average
B. initial
C.residual
D. cumulative
Answer:
A . average
explanation
Accounting rate of return can be calculated by dividing the average net income by the average investments.
Accounting rate of return = Average net income / Average investments
