The average accounting return:
A)measures profitability rather than cash flow.
B)discounts all values to today's dollars.
C)is expressed as a percentage of an investment's current market value.
D)will equal the required return when the net present value equals zero.
E)is used more often by CFOs than the internal rate of return.

Question

Quizplus · Accepted Answer

The average accounting return measures profitability by comparing average net income to average investment, rather than focusing on cash flow.

The Average Accounting Return