Which of the following is not used in the calculation of the accounting rate of return?
A)Additional revenues generated by the investment
B)All additional operating expenses
C)Amount of the initial investment
D)Present value of an annuity factor

Question

Quizplus · Accepted Answer

The present value of an annuity factor is not used in the calculation of the accounting rate of return. The formula for the accounting rate of return is (average annual income from investment) / (initial investment). The additional revenues and operating expenses are taken into account when determining the average annual income from the investment.

Which of the Following Is Not Used in the Calculation