Calculate a project's profitability with the Accounting Rate of Return (ARR). Learn the formula, its pros and cons, and how to use it for investment decisions.

Internal Rate of Return IRR is the discount rate that pushes the difference between the present value of cash inflows and present value of cash outflows to zero.

The accounting rate of return (ARR) is "not only a central feature of any basic text on financial statement analysis but also figures commonly in the evaluation by investment analysts of the financial ...