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Nov 02, 2021 · The accounting rate of return (ARR) is a formula that reflects the percentage rate of return expected on an investment or asset, compared to the initial investment’s cost.

Apr 11, 2021 · The accounting rate of return is the expected rate of return on an investment. The calculation is the accounting profit from the project, divided by the initial investment in the project. One would accept a project if the measure yields a percentage that exceeds a certain hurdle rate used by the company as its minimum rate of return.

Accounting Rate of Return (ARR) is the percentage rate of return that is expected from an investment or asset compared to the initial cost of investment. Typically, ARR is used to make capital budgeting decisions.

If the ARR is equal to 5%, this means that the project is expected to earn five cents for every dollar invested per year. In terms of decision making, if the ARR is equal to or greater than a company’s required rate of returnHurdle Rate DefinitionA hurdle rate, which is also known as minimum acceptable rate of return (MARR), is the minimum required rate of return or target …

Nov 19, 2021 · The accounting rate of return (ARR) is an indicator of the performance or profitability of an investment. It is also known as ARR or accounting profit rate of return.