The average accounting rate of return (AAR): Select one: o a

Finance Aug 08, 2020

The average accounting rate of return (AAR): Select one: o a. is the best method of financially analyzing mutually exclusive projects. b. is similar to the return on assets ratio. oc. is the primary methodology used in analyzing independent projects. O d. measures net income as a percentage of the sales generated by a project. e. considers the time value of money.

Expert Solution

b) is similar to the return on asset ratio

AAR is nothing but Average of net income / Average investment , thus it is similar to that of retun on asset ratio

AAR ignores time value of money and hence it is not best method to analyze the project

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