Accrual accounting rate of return method
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Accrual accounting rate of return method (AARR method) is capital budgeting method that divides an accrual accounting measure of average annual income of a project by an accrual accounting measure of its investment. See also return on investment (ROI).
Definitions
According to Cost Accounting by Horngren, Datar, Rajan (14th edition),
- Accrual accounting rate of return method (AARR method). Capital budgeting method that divides an accrual accounting measure of average annual income of a project by an accrual accounting measure of its investment. See also return on investment (ROI).