Asked by Cylas Kawika on May 16, 2024
Verified
One of the strengths of the simple rate of return method is that it takes into account the time value of money in computing the return on an investment project.
Simple Rate of Return
A financial metric that measures the efficiency of an investment as the annual income divided by the initial investment cost.
Time Value of Money
The principle that a sum of money is worth more now than the same sum in the future due to its potential earning capacity.
- Acquire understanding of the simple rate of return method and its utilization.
Verified Answer
RS
Rinki sehrawatMay 22, 2024
Final Answer :
False
Explanation :
The simple rate of return method does not take into account the time value of money in computing the return on an investment project.
Learning Objectives
- Acquire understanding of the simple rate of return method and its utilization.