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Managers may use the accounting rate of return to evaluate potential investment projects because a.debt contracts require that a firm maintain certain ratios that are
Managers may use the accounting rate of return to evaluate potential investment projects because
a.debt contracts require that a firm maintain certain ratios that are affected by income and long-term asset levels.
b.it can be tied to the manager's personal income.
c.it serves as a screening measure to insure that new investments do not affect key financial ratios.
d.bonuses to managers may be based on accounting income and/or return on assets.
e.All of these choices are correct.
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