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Average Rate Of Return
A method of evaluating a capital investment proposal that focuses on the expected profitability of the investment; computed as average annual income divided by average investment. Also referred to as accounting rate of return.
Average Income
The mean amount of earnings generated over a specified period of time, taking into account all revenue sources.
Cash Payback Method
The cash payback method is a capital budgeting method that estimates the time required for a project to generate cash flows sufficient to recoup the initial investment.
Average Rate Of Return Method
An investment appraisal technique that calculates the expected return of an investment by averaging its annual profits and dividing by its initial cost.
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