What is the main disadvantage of the annual rate of return method?
A) It is only valid for investments with a one year time perspective.
B) It incorporates depreciation into the calculations, which increases the uncertainty of the calculations associated with estimating the life and salvage value of the investment.
C) No consideration is given as to when the cash inflows occur.
D) It does not consider the time value of money.
Correct Answer:
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