The average accounting return method
A)ignores some project years.
B)ignores the timing of net income.
C)properly discounts all values.
D)is preferred by financial analysts over the alternative methods.
E)is never used in practice.

Question

Quizplus · Accepted Answer

The average accounting return method ignores the timing of net income, which means that it does not take into account when the returns are earned. This can be a significant drawback in evaluating projects, as it fails to consider the time value of money. Therefore, the best choice is B.

The Average Accounting Return Method