Calculating ARR, The Accounting Rate Of Return

*Note : I am going to add my Corporate Strategy Assigment when i was at the university about Financial Investment Methods. Enjoy it :)

PART -8

6.   THE ACCOUNTING RATE OF RETURN (ARR)

6.1 CALCULATING (ARR)

The accounting rate of return method (ARR) is used for increasing the success and yield of the investment projects. If the project surpass their rate of return (ARR) expectations, it can be satisfactory. 

The formulate ARR is established on initial investment or else average investment. This investment technique applies the profits of the project as an alternative of cash flow.