disadvantage of using the accounting rate of return to evaluate investment alternatives is that Group of answer choices A. It is superior to IRR. B. When net incomes vary from year to year, the ARR will also vary across years, making the project seem desirable in one year and not another. C. It considers the time value of money. D. It is easy to understand and it allows comparison or projects. E. Using ARR has no disadvantages.

Q: Which of the following is not an advantage of the average rate of return method? a.includes the…

A: Average rate of return is a method of calculating return on the asset

Q: Which of the following statements is false? (You may select more than one answer.)a. The payback…

A: Cash payback method: Cash payback period is the expected time period which is required to recover…

Q: 1. Simulation analysts uses best- and worst case scenarios to determine the most likely outcome 2.…

A: The first statement is false. Simulation analysts use best- and worst-case scenarios to understand…

Q: Which of the following statements is correct regarding the payback method? Takes account of…

A: Payback period is a tool of capital budgeting used to evaluate projects and investments.

Q: For researchers to consider an investment strategy to have delivered abnormal returns, it must have…

A: Abnormal returns measured as stocks actual return less the stock expected return based on its beta…

Q: A disadvantage of using the payback period to compare investmentalternatives is that it;

A: Payback period: The payback period is the time period required to recover the initial investment of…

Q: Which of the following are significant flaws with the Payback Period Method? (Select all that apply)…

A: Payback period method is a capital budgeting method which will help in finding time period within…

Q: Differences between the ERR and the IRR include the following: a. The ERR will yield a unique…

A: From the various given statements, we have to find the difference between the internal rate of…

Q: Capital investment evaluation methods can be grouped into which of the foll ing a. Methods that use…

A: Captial investment evaluation methods are the methods to evaluated viability of long term project.…

Q: If we use future value rather than present value to decide whether to make an investment, A) we…

A: Future Value is the value of cashflows in some date in future.  Present value is the Discounted…

Q: Which of the following statements is TRUE about risk-free investment? a. Return in risk-free…

A: Risk free investment is an investment which gives low consistent returns and is a safe, secure…

Q: What should a manager do with a project that has two internal rates of return (IRRs)? O a. Do the…

A: IRR, or Internal Rate of Return, is a financial metric used to determine the profitability of an…

Q: Which of the following is a disadvantage of the internal rate of return criterion? Select one: a.…

A: Internal rate of return (IRR): At IRR, cash outflow will be equal to the present value of cash…

Q: Which of the following is a disadvantage of the IRR project evaluation method? Question 5Select…

A: IRR is also known as Internal Rate of Return.. It is a capital budgeting technique which helps in…

Q: If the internal rate of return (IRR) is less than the cost of capital, then the investment is…

A: False If the internal rate of return (IRR) is less than the cost of capital, then the investment is…

Q: Net present value: is very similar in its methodology to the average accounting return. is the…

A: Capital budgeting: A business goes through the process of capital budgeting to look at potential big…

Q: The following is a disadvantage of ARR investment appraisal method (select one):   A. multiple or…

A: Accounting rate of return is a method that is used for evaluating the investment proposal. It is…

Q: A unique feature of the analysis of a replacement decision is that Group of answer choices a. the…

A: The question is related replacement problem and the problem is of Capital Budgeting. In replacement…

Q: appropriate option (i) The rate of return method does not take care of timings of returns. (ii)…

A: Investment appraisal techniques are used to identify whether to invest or not in the project.   Rate…

Q: If an investment project has a negative net present value (NPV), which one of the following…

A:

Q: Which of the following is a disadvantage of the average rate of return method? a. fails to…

A: The question is asking about the disadvantages of the average rate of return method in accounting.…

Q: profitability

A: Profitability index is defined as the method of determining the attractiveness of an investment. The…

Q: Which of the following performance measures will decrease if the minimum required rate of return…

A: Return on investment is the return earned by the investment on its investment. It is computed by…

Q: The ARR has one specific advantage not possessed by the payback period in that it a.considers the…

A: Definition:

Q: Which of the following is a disadvantage of the IRR project evaluation method? Select one: a. It…

A: IRR is the rate at which NPV is zero.

Q: When different investment rules give conflicting answers, then decisions should be       based on…

A: The net present value is a discounted cash flow method that takes into consideration the time value…

Q: Below are some statements about risk and investment appraisal. Which one is incorrect? A.…

A: risk increase with the length of a project.