Accounting Rate of Return
The accounting rate of return is computed by dividing the estimated annual income by the average investment. It is a way of evaluating potential capital investments.
The estimated annual income is the expected return over the life of the project minus depreciation and the average investment is the initial cost + residual value divided by 2.
Sign Up to Learn More!
Join our mailing list today to get notified of new discount offers, course updates, Roger CPA Review news, and more!