alleryStart learning →The accounting rate of return is grouped with the payback method because both are:
ATime value methods
BPurely tax-based methods
CPurely audit-based methods
DNon-time value methods
Answer & Solution
Correct answer: D. Non-time value methods
1. The grouping follows whether discounting is used.
2. Four common measurement methods are named.
3. Two non-time value evaluative methods are the payback method and the accounting rate of return.
4. NPV and IRR make up the other family.
_Source: OpenStax Principles of Accounting, Volume 2: Managerial Accounting (CC BY-NC-SA 4.0), Ch 11 'Capital Budgeting Decisions'_
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