Which of the following is a limitation of the ARR method of capital budgeting?
A)It ignores depreciation.
B)It fails to account for all cash flows of the project.
C)It ignores the time value of money.
D)All of the above

Question

Quizplus · Accepted Answer

The ARR method does not consider the time value of money, which is a significant limitation in evaluating the profitability of long-term projects.

Which of the Following Is a Limitation of the ARR