The decision rule for the accounting rate of return method of assessing investment projects is to accept all projects with:

Question

Quizplus · Accepted Answer

The accounting rate of return method requires a minimum required rate of return to be set. All projects with a return that is greater than or equal to this minimum required rate of return are accepted. Therefore, choice B is the correct answer as it states that projects with the highest return subject to a minimum required return should be accepted. Choices A and C are incorrect as they do not take into account the minimum required rate of return. Choice D is also incorrect as one of the other choices must be selected.

The Decision Rule for the Accounting Rate of Return Method