The capital budgeting analytical technique that calculates the rate of return on the investment based on the impact of the investment on the 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

Accounting rate of return calculates the rate of return on the investment based on its impact on the financial statements, such as the income statement and balance sheet. Internal rate of return, payback period, and net present value also analyze investment decisions, but do not specifically focus on the impact on financial statements.

The Capital Budgeting Analytical Technique That Calculates the Rate of Return