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Which Statement About Payback Method and the Accounting Rate of Return

Question 8

Multiple Choice

Which statement about payback method and the accounting rate of return method are correct?  Profitability  Time Value of Money i Ignored by both methods  Ignored by both methods ii Ignored by both methods  Used in accounting rate of return; ignored  by payback method iii Considered by accounting method, not by  Ignored by both methods  payback iv Considered by accounting method, not by  Considered by both methods  payback \begin{array}{lll}&\text { Profitability } & \text { Time Value of Money } \\i&\text { Ignored by both methods } & \text { Ignored by both methods }\\ii&\text { Ignored by both methods }&\text { Used in accounting rate of return; ignored }\\&&\text { by payback method }\\iii&\text { Considered by accounting method, not by }&\text { Ignored by both methods }\\&\text { payback }\\iv&\text { Considered by accounting method, not by }&\text { Considered by both methods }\\&\text { payback }\end{array}


A) i
B) ii
C) iii
D) iv

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