ARR (Accounting Rate of Return) is calculated by dividing the average annual profit by the initial investment amount and then multiplying by 100 to express it as a percentage.

Solved

ARR Is Expressed As:

A) $\frac {\text { Total annual profit }} { \text { Total invested} }$

Question 7

Multiple Choice

ARR is expressed as:

A) $\frac {\text { Total annual profit }} { \text { Total invested} }$ $\times 100$

B) $\frac {\text { Average annual profit }} { \text {Amount initially invested } }$ $\times 100$

C) $\frac {\text { Amount initially invested }} { \text { Average annual profit} }$ $\times 100$

D) $\frac {\text { IRR}} { \text {Amount initially invested } }$ $\times 100$