CALCULATING AVERAGE RATE OF RETURN

Question 1

What is average rate of return (ARR)

Answer 1

Average rate of return (ARR) - Can sometimes be know as the annual rate of return

Calculates average annual profit generated by a project as a percentage of the initial investment

Question 2

What is the formula for working out average rate of return (ARR)

Answer 2

Formula = Average annual return divided by initial outlay X 100

Question 3

Chart examples

Answer 3

https://docs.google.com/document/d/1zItDTHQjlcS3i6HiZx4JzkMrIDxh5jHM-69GBG9GdYQ/edit

Question 4

How to calculate the charts

Answer 4

https://www.youtube.com/watch?v=O5Y677MM-1o&list=PL12ABlJJFqksmYHfIBm2qlF3PwNb4-ltI&index=65