The annual rate of return technique requires dividing a project's annual cash inflows by the economic life of the project.

Name: The annual rate of return technique requires dividing a project's annual cash inflows by the economic life of the project.
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The annual rate of return technique typically involves dividing the average annual profit (or cash inflow) by the initial investment cost, not by the economic life of the project.

The Annual Rate of Return Technique Requires Dividing a Project's