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ARR
ARR Definition
Accounting Rate of Return, also known as the Average Rate of Return (ARR) is a financial ratio used in capital budgeting. ARR is the ratio of profit to the amount of investment made in the project. This makes it easy for an investor to get an estimate of the profit potential of projects and investments.
Usage
For example, if a project is expected to earn 5 cents for every dollar invested then the ARR is said to be 5%.
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