Asked by jesus salazar on Jun 14, 2024
Verified
The accounting rate of return (ARR)is computed by dividing a project's after-tax net income by the average annual investment.
Accounting Rate of Return
A financial ratio that measures the expected profit from an investment compared to its initial cost.
After-Tax Net Income
The profit remaining after all operating expenses, including taxes, have been deducted from total revenue.
Annual Investment
The amount of money invested in a particular asset or project on a yearly basis.
- Analyze the role of accounting rate of return (ARR) and how it differs from cash flow-based evaluation methods.
Verified Answer
BB
Bucky BarnesJun 19, 2024
Final Answer :
True
Explanation :
This is the correct formula for calculating the accounting rate of return (ARR).
Learning Objectives
- Analyze the role of accounting rate of return (ARR) and how it differs from cash flow-based evaluation methods.
Related questions
The Accounting Rate of Return Is Based on Cash Flows ...
Accounting Rate of Return Gives Managers an Estimate of How ...
The Accounting Rate of Return (ARR)is Computed by Dividing a ...
The Accounting Rate of Return Is Calculated As ...
Assuming That Net Cash Flows Are Received Evenly Throughout the ...