Average rate of return

The annual average rate of return on the first investment is 18,000... 

I] = fixed capital investment i = average rate of return on investment, 12%... 

Investment decisions are often based upon several criteria, such as annual return on investment (ROI), payback period (PBP), net present value (NPV), the average rate of return (ARR), present value ratio (PVR), or the internal rate of return (IRR). Discounted cash flow rate on return (DCFRR) is another popular means of evaluating the economic viability of a proposed project. Horwitz [1] recommended the DCFRR as the best means to determine the return on investment, because it accounts for the time value of money. The internal rate of return as an investment criterion gives the possibility that given cash flows may result in more than one internal rate of return. Cannaday et al. [2] developed a method for determining the relevance of an internal rate of return. They inferred that an internal rate of return is relevant, if its derivative with respect to each of the cash flows is positive. 

The average rate of return (ARR) method averages out the cash flow over the life of the project. This is defined by... 

PRESENT VALUE RATIO, THE AVERAGE RATE OF RETURN, THE NET ... 

Average rates of return to assets (ROA) and equity (ROE) show a mixed story. The... 

For projects, where the cash flow extends over a number of years, the average rate of return is calculated using an average value for the profit, by dividing the sum of the annual profits by the useful lifetime ... 

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