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outline four limitation of the accounting rate of return method of appraising new investment.
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The accounting rate of return on stockholders investments is measured by?
The accounting rate of return stockholders investments is measured by?
What are the limitations of accounting rate of return?
The AAR is good capital budgeting tool because managers can compare it to objective benchmarks. Yet one limitation is that ARR uses profit rather than cashflows, and it does not account for the time value of money (TVM)For more information on the accounting rate of return (AAR) please visit: http://www.drtaccounting.com/2008/03/calculate-average-accounting-return.html
What is the limitation of accounting?
one of the most limitation of accounting is measurement by historical cost
Limitation of computerized accounting?
One limitation of computerized accounting is that some errors can go undetected. A human mind has better judgment as to what is sensible and prudent in accounting.
Are accounting rate of return and payback period non discount cashflow methods?
YES
The accounting rate of return on stockholders investments is measured by?
The accounting rate of return stockholders investments is measured by?
What are the limitations of accounting rate of return?
The AAR is good capital budgeting tool because managers can compare it to objective benchmarks. Yet one limitation is that ARR uses profit rather than cashflows, and it does not account for the time value of money (TVM)For more information on the accounting rate of return (AAR) please visit: http://www.drtaccounting.com/2008/03/calculate-average-accounting-return.html
How is the accounting rate of return on stockholders investments measured?
return on equity
What are the differences between accounting rate of return and internal rate of return?
Internal rate of return (IRR) is a discounted method used for Capital budgeting decisions (investment etc) while accounting rate of retun is a measure for calculating return for a one off payment. IRR is actually the discount rate that equates the Present value of the cash flows to the NPV of the project (investment) while accounting rate of return just gives the actual rate of return. Habib topu1910@gmail.com
What is the limitation of accounting?
one of the most limitation of accounting is measurement by historical cost
What are the three capital expenditure techniques?
Internal rate of return, net present value, accounting rate of return and payback method.
Limitation of computerized accounting?
One limitation of computerized accounting is that some errors can go undetected. A human mind has better judgment as to what is sensible and prudent in accounting.
Are accounting rate of return and payback period non discount cashflow methods?
YES
Why you use average invetsment in accounting rate of return technique?
If the investment is derived from income, look at the return and make a choice
True or FalseBoth the IRR rule and the accounting rate of return rule take into consideration the time value of money?
accounting rate of return not take into consideration the time value of money as regrading to actual financial statements which prepare on the historical cost
Alternatives to overcome the limitation of financial accounting?
what are the alternatives to overcome the limitations of financial accounting
Limitation of accounting information?
The limitations of accounting information Despite the usefulness of accounting information, there are some limitations: 1. An accountin
