Accounting rate of return (ARR) - Financial definition
Financial acronyms
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Concise definition of the term accounting rate of return
The accounting rate of return is a financial ratio that measures the expected rate of return of an asset or investment by dividing the average annual accounting profit by the initial investment.
Comprehensive definition of the term accounting rate of return
The accounting rate of return does not take into account the time value of money, i.e. one euro earned next year accounts for the same as one euro earned in 30 years.