What is the denominator in the average accounting rate of return technique?
A)Average invested capital
B)Required rate of return
C)Average income
D)EBDIT

Question

Quizplus · Accepted Answer

The denominator in the average accounting rate of return technique is the average invested capital, which includes the average of the beginning and ending book value of long-term assets, less accumulated depreciation, and any related deferred income tax liability. This represents the average amount of capital invested in the business during the period being evaluated, and is used to calculate the return generated by the business operations.

What Is the Denominator in the Average Accounting Rate of Return