Question: what is the accounting rate of return on the​ investment

title: Accounting rate of return
text: Accounting rate of return , also known as the Average rate of return , or ARR is a financial ratio used in capital budgeting . 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 . Say , if ARR = 7 % , then it means that the project is expected to earn seven cents out of each dollar invested ( yearly ) . If the ARR is equal to or greater than the required rate of return , the project is acceptable . If it is less than the desired rate , it should be rejected . When comparing investments , the higher the ARR , the more attractive the investment . More than half of large firms calculate ARR when appraising projects . 

Answer: answer: Accounting rate of return is a financial ratio used in capital budgeting, and it calculates the return, generated from net income of the proposed capital investment.