GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which method of capital budgeting is known as ‘Accounting Rate of Return Method’?
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Return on Investment
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Rate of Return Method
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Average Rate of Return Method
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All of the above
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Explanation:
Detailed explanation-1: -The internal rate of return (IRR) is a metric used in capital budgeting to estimate the return of potential investments. The payback period refers to the amount of time it takes to recover the cost of an investment or how long it takes for an investor to hit breakeven.
Detailed explanation-2: -Capital budgeting is the process by which investors determine the value of a potential investment project. The three most common approaches to project selection are payback period (PB), internal rate of return (IRR), and net present value (NPV). More items
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