average rate of return

Question 1

what is return on investment

Answer 1

how much a business makes or loses as a proportion of the original investment that it puts in

Question 2

ARR equation

Answer 2

average annual profit/ initial capital outlay x100

Question 3

steps to calculate ARR

Answer 3

1. calculate average annual profit by adding all profits together and dividing by the number of years
2. divide answer by initial capital outlay
3. times answer by 100

Question 4

what does the bigger the ARR for an investment mean

Answer 4

the more successful the investment is for a business