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shortcoming of using the Average Accounting Return method

Which of the following is NOT a shortcoming of using the Average Accounting Return method to make financial decisions?

A) Uses Financial Statements as relevant input data.
B) Offers no guidance on what the right targeted rate of return should be.
C) Takes no account of time value.
D) Uses averages.
E) May result in multiple rates of return.

Solution Preview

Answer E.

All others are shortcomings. The financial statements does not always ...

Solution Summary

A shortcoming of using the Average Accounting Return method is presented.

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