Accounting Rate of Return - ARR

Filed Under » Accounting , Acronyms , Financial Theory

	Definition of 'Accounting Rate of Return - ARR' ARR provides a quick estimate of a project's worth over its useful life. ARR is derived by finding profits before taxes and interest.
	Investopedia explains 'Accounting Rate of Return - ARR' ARR is an accounting method used for purposes of comparison. The major drawbacks of ARR are that it uses profit rather than cashflows, and it does not account for the time value of money.

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