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 helpful in evaluating an investment, it is not considered as essential as estimating relevant cash flows, calculating a figure of merit, and comparing that figure to an acceptance criterion. Therefore, option B is not an important step in the financial evaluation of an investment opportunity.

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