Accounting rate of return (also known as simple rate of return) is the ratio of estimated accounting profit of a project to the average investment made in the. If you have already studied other capital budgeting methods (net present value method, internal rate of return method and payback method), you may have. The amount of profit, or return, that an individual can expect based on an investment made. Accounting rate of return divides the average profit by the initial.
Book rate of return Video