The analytical method in capital budgeting that calculates the rate of return on an investment project based on the impact the investment project has on the organization's financial statements is known as the:
A)internal rate of return.
B)accounting rate of return.
C)payback period.
D)net present value.

Question

Quizplus · Accepted Answer

The accounting rate of return (ARR) calculates the rate of return on an investment based on the impact on the organization's financial statements, specifically using accounting profits rather than cash flows.

The Analytical Method in Capital Budgeting That Calculates the Rate