Managers may use the accounting rate of return to evaluatepotential investment projects because

a.debt contracts require that a firm maintain certain ratiosthat 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 newinvestments do not affect key financial ratios.

d.bonuses to managers may be based on accounting income and/orreturn on assets.

e.All of these choices are correct.