Question
1. A strength of the average accounting return (AAR) method of project analysis is the fact that AAR: A. is easy to calculate. B. ignores
1. A strength of the average accounting return (AAR) method of project analysis is the fact that AAR:
A. is easy to calculate.
B. ignores the issue of taxes.
C. uses a cutoff rate.
D. is based on accounting values.
E. considers the time value of money.
2. Which one of these statements related to discounted payback is correct?
A. Payback is a better method of analysis than discounted payback.
B. Discounted payback does not require a cutoff point.
C. Discounted payback is biased towards short-term projects.
D. The discounted payback period increases as the discount rate decreases.
E. Discounted payback is used more frequently in business than payback.
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