An investment is acceptable if its average accounting return (AAR):
A)is less than a target AAR.
B)exceeds a 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 considered acceptable if its AAR exceeds the target AAR. A higher AAR indicates a higher average expected return on the investment, which is favorable for the investor.

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