Accounting rate of return method, finance, Other Engineering

Accounting rate of return method, finance, Other Engineering

Assignment Help:

Accounting rate of return method
ARR method is also known as ‘Return on Investment Method’. Here accounting information as shown in the financial statement is the basis for measuring the profitability of an investment (I.M. Pandey, 2005).
Average Income
ARR = ________________________
Average Investment
Accept Reject Rule:
Accept if the projects ARR > Minimum Required Rate
Reject if the projects ARR < Minimum Required Rate (I.M. Pandey, 2005).
Merits:
1. Simple to understand and use
2. Readily calculated by referring to financial statements
3. Considered entire income in calculating the profitability
De-merits:
1. It uses accounting profits and not the cash flows in evaluating a project.
2. Time value of money is ignored as average income is taken (I.M. Pandey, 2005).

Related Discussions:- Accounting rate of return method, finance

Aviation legislation design and type certificate, Design, Construction and ...

Design, Construction and Type Certificate The following chapter covers the initial design, construction, registration and test flying of the first prototype of a new aircraft.

Propeller spinners, PROPELLER SPINNERS All modern propeller-driven aero...

PROPELLER SPINNERS All modern propeller-driven aeroplanes have spinners over their propeller hubs. These spinners have the dual aerodynamic function of streamlining the engine

Siliconizing, 1.defination 2.explain the mechanisms of each process. 3. exp...

1.defination 2.explain the mechanisms of each process. 3. explain in detail how many types of each process 4. advantages 5. disadvantages

Dsp, Dit fft idft

Dit fft idft

Thermofluids 1- aeronautical option, general energy equation, non- flow ene...

general energy equation, non- flow energy equation, steady flow equation, joule''s law

Analog electronic, High frequency mode of bjt amplifier

High frequency mode of bjt amplifier

Combustion chamber injection system - aircraft engine , Combustion chamber ...

Combustion chamber injection system: Injecting a water or water/methanol mixture into the combustion chambers increases the mass flow through the turbine and the high volumetri

Crystallographic notation, Q. W hat do you understand by crystallographic n...

Q. W hat do you understand by crystallographic notation of atomic planes/Explain with the help of examples. Ans.Crystallographic Notation 1. Crystal Symmetry:

Biasing of fet, how many type of fet is present

how many type of fet is present

Engine, #question.what if i poured diesel in petrol engine and petrol in di...

#question.what if i poured diesel in petrol engine and petrol in diesel engine.

Write Your Message!

Name

Email id

Message

Verfication Code

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd