Question

accounting rate of return is the ratio of average value of
a.. profit after tax to salvage value of the investment
b.. profit before tax to present value of investment
c.. profit after tax to book value of the investment
d.. profit after tax to present value of investment​

Answer 1

Answer:

(c) profit after tax to book value of the investment

ARR

Arr is the financial ratio used in capital budgeting

it provides expected rate of return

Answer 2

Answer:

The correct answer of this question is the profit after tax to book value of the investment

Explanation:

Given -  Accounting rate of return is the ratio of average value .

To Find  - Write the correct option of accounting rate of return is the ratio of average value of .

Accounting rate of return is the ratio of average value of profit after tax to book value of the investment.

Accounting rate of return, also known as ARR, is a financial ratio used in capital budgeting. The ratio does not consider the concept of time value of money. ARR calculates the return generated by the proposed capital investment's net income. The financial ratio Arr is used in capital budgeting to provide the expected rate of return.

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