Available under Creative Commons-NonCommercial-ShareAlike 4.0 International License.
The average rate of return is calculated by dividing average annual net income by average investment. When comparing projects, the highest average rate of return is selected, but consideration for risk is given. The method is commonly used to determine investment proposals with a short life span, and therefore, it is not essential to use present values. The advantage of the method is its simplicity, but ignoring time value of money is a drawback.
- 瀏覽次數：1309
