Accounting Rate of Return

Previous Lesson: Payback Period

The accounting rate of return, also called the average rate of return is defined as:

accounting rate of return formula

Find out Accounting Rate of Return overall and individual in order to decide which year is best?

accounting rate of return example

(Acceptance Criterion: The higher the accounting rate of return the better the project)

Which one of the following project is best using Non-Discounting Criteria?

References

Financial Management: Theory and Practice, Dr Eugene F Brigham & C Micheal Ehrhardt

Fundamentals of Financial Management: Concise Edition, Brigham Houston

The Economist Guide to Financial Management, John Tennet

Financial Management: Core Concepts, Raymond M Brooks