Which three of the following are likely to result from managers focusing on accounting rates of return?
A) Short- termism
B) Extensive investment in the long term
C) Reduction in value in the long- term
D) Reluctance to invest in new equipment

Question

Quizplus · Accepted Answer

Focusing solely on accounting rates of return can lead to managers making short-term decisions, such as cutting costs and delaying investments in order to increase short-term financial performance. This can result in a reduction in long-term value, as important investments are delayed or avoided altogether. Additionally, managers may become reluctant to invest in new equipment or technology if they do not believe it will lead to an immediate increase in accounting rates of return.

Which Three of the Following Are Likely to Result from Managers