When computing the accounting rate of return for a capital asset, which of the following is used as the equation's numerator?

Question

Quizplus · Accepted Answer

In the accounting rate of return formula, the numerator is the average annual operating income from the asset, which represents the expected return generated by the asset. This measure of profitability is often expressed as a percentage of the initial investment or the average amount invested in the asset. However, the denominator is not used as part of the numerator.

When Computing the Accounting Rate of Return for a Capital