The accounting rate of return considers the time value of money.

Name: The accounting rate of return considers the time value of money.
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The accounting rate of return (ARR) does not consider the time value of money. It is calculated as the average annual profit divided by the initial investment. ARR is a simple but limited method of evaluating the profitability of an investment, as it does not take into account the timing of cash flows and fails to consider the cost of capital.

The Accounting Rate of Return Considers the Time Value of Money