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The accounting rate of return, also known as average rate of return, or ARR, is a financial ratio used in capital budgeting. [1] The ratio does not take into account the concept of time value of money. ARR calculates the return, generated from net income of the proposed capital investment. The ARR is a percentage return.
The geometric average return is equivalent to the cumulative return over the whole n periods, converted into a rate of return per period. Where the individual sub-periods are each equal (say, 1 year), and there is reinvestment of returns, the annualized cumulative return is the geometric average rate of return.
Since this is a down year for the market, with an average return rate of -16.15% through September 2022, inflation makes the loss harder. Not only did you lose money this year, but your money is ...
1.1 The problem of external flows. 1.1.1 Example 1. ... The overall rate of return is the time-weighted average of the continuous rate of return in each sub-period.
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Internal rate of return (IRR) is a method of calculating an investment's rate of return. The term internal refers to the fact that the calculation excludes external factors, such as the risk-free rate , inflation , the cost of capital , or financial risk .
When you’re considering buying into an annuity, it’s natural to wonder what kinds of returns they typically attain. The rate of return is an important factor in the growth of their portfolio ...
Rate-of-return regulation (also cost-based regulation) is a system for setting the prices charged by government-regulated monopolies, such as public utilities.It attempts to set prices at efficient (non-monopolistic, competitive) levels [1] equal to the efficient costs of production, plus a government-permitted rate of return on capital.