Which of the following is not an important step in the financial evaluation of an investment opportunity?
A) Calculate a figure of merit for the investment.
B) Estimate the accounting rate of return for the investment.
C) Estimate the relevant cash flows.
D) Compare the figure of merit to an acceptance criterion.
E) All of the above are important steps.

Question

Quizplus · Accepted Answer

While estimating the accounting rate of return can be a useful tool, it is not considered a crucial step in financial evaluation of investment opportunities. The other options (calculating a figure of merit, estimating cash flows, and comparing to an acceptance criterion) are all important steps.

Which of the Following Is Not an Important Step in the Financial