The average accounting return (AAR) rule can be best stated as:
A) An investment is acceptable if its AAR is less than a target AAR.
B) An investment is acceptable if its AAR exceeds a target AAR.
C) An investment is acceptable if its AAR exceeds the firm's return on equity (ROE).
D) An investment is acceptable if its AAR is less than the firm's return on assets (ROA).

Question

Quizplus · Accepted Answer

The average accounting return (AAR) rule states that an investment is considered acceptable if its AAR is greater than a specified target AAR, making it a benchmark for investment decisions.

The Average Accounting Return (AAR) Rule Can Be Best Stated