Answered: Which of the following ROIs uses the…

Which of the following ROIs uses the income computed under the accrual basis? A. Accounting rate of Return (ARR) B. Internal rate of return (IRR) C. Payback reciprocal D. True rate of return

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 12MC: Which of the following does nor assign a value to a business opportunity using time-value...

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Question

Which of the following ROIs uses the income computed under the accrual basis?

A. Accounting rate of Return (ARR)

B. Internal rate of return (IRR)

C. Payback reciprocal

D. True rate of return

Definition Definition Discount rate of a project wherein its net present value equals zero. Internal rate of return equates the present value of future cash flows with the initial investments. Internal rate of return helps to determine nominal cash flows.

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