Define accounting rate of return
What do you understand by the term accounting rate of return?
Expert
Accounting rate of return is also named as Average rate of return that gives the financial ratio employed in capital budgeting. The ratio takes time value of money factor that computes the return and the net income can be created from the proposed capital investment. It is employed to explain the percentage return. The method of computation is illustrated below: ARR= Average profit/average investment
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