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Which of the following is a disadvantage of using the average accounting return ( AAR ) as an investment criterion? I. AAR uses an arbitrary
Which of the following is a disadvantage of using the average accounting return AAR as an
investment criterion?
I. AAR uses an arbitrary benchmark cutoff rate.
II AAR is difficult to calculate, as it requires estimated future values of variables.
III. AAR is based on accounting and not market values.
a I, II and III are all disadvantages
b only I and III are disadvantages
c only I is a disadvantage
d only II is a disadvantage
e only III is a disadvantage
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