ARR Flashcards
1
Q
What is the formula for Average Annual Return
A
arr/investment x 100
2
Q
1st step for calculating AAR
A
Work out total return =
+ve cashflows - cost of investment
3
Q
whats step 2
A
calculate average annual return =
total return / # of years
4
Q
whats step 3
A
divide AAR/ investment
x 100
5
Q
ARR simple calculation
A
total net inflows/ number of years
divided by
investment
x 100
