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Vuola Botros
on Nov 08, 2024

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An investment's average net income divided by its average book value is the:

A) Net present value.
B) Internal rate of return.
C) Average accounting return.
D) Profitability index.
E) Payback period.

Average Accounting Return

A measure of an investment's profitability, calculated as the average net income divided by the average investment.

Average Book Value

The mean value of an asset or investment determined by its original cost minus depreciation or amortization.

  • Recognize the limitations and applications of Average Accounting Return (AAR) in investment decisions.
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MR
Maphanzela RevivalNov 12, 2024
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