A project is acceptable if its average accounting return exceeds a target average accounting return is known as, Average Accounting Return Rule.
Target average:
In economics, target average refers the average weight per animal agreed and set out in the Fourth Schedule to this agreement.
Given,
Here we need to find the a project is acceptable if its average accounting return exceeds a target average accounting return.
In order to find the term, we must know the definition of average accounting return,
It means the percentage rate of return expected on an investment or asset, compared to the initial investment's cost.
According to this definition, if its average accounting return exceeds a target average accounting return.
Therefore, this defines the average accounting return rule of the project.
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