An investment is acceptable if its average accounting return (AAR)
A)exceeds the target AAR.
B)is less than the target AAR.
C)exceeds the firm's return on equity (ROE).
D)is less than the firm's return on assets (ROA).
E)is equal to zero.

Question

Quizplus · Accepted Answer

An investment is acceptable if its AAR exceeds the target AAR. This means that the investment is generating a return that is higher than the minimum acceptable rate of return set by the investor or the company. Therefore, option A is the correct answer.

An Investment Is Acceptable If Its Average Accounting Return (AAR)