_____ is a nondiscounted-cash-flows model that has profitability as an objective.

Question

Quizplus · Accepted Answer

The accounting rate of return is a model that measures profitability by comparing the average annual income earned from an investment to the initial investment cost. It does not consider the time value of money or cash flows, but instead focuses on the accounting earnings. The other choices (payback, internal rate of return, net present value) are all discounted-cash-flows models that do consider the time value of money and are used to analyze investment decisions from a financial perspective.

_____ Is a Nondiscounted-Cash-Flows Model That Has Profitability as an Objective