Assessing investments: Accounting approach
ARR, Average accounting rate of return
The cash flows of an investment are shown in the table below.
\[\begin{array}{c|c} &\text{Cash flows}\\ \hline\ C_0 &-475\\\ C_1 & 180 \\ \ C_2 & 230 \\ \ C_3 & 250 \\ \ C_4 & 250 \\ \ C_5 & 270 \\ \end{array}\]
Calculate the average accounting rate of return for this investment. Give your answer with two decimal places.
\[\begin{array}{c|c} &\text{Cash flows}\\ \hline\ C_0 &-475\\\ C_1 & 180 \\ \ C_2 & 230 \\ \ C_3 & 250 \\ \ C_4 & 250 \\ \ C_5 & 270 \\ \end{array}\]
Calculate the average accounting rate of return for this investment. Give your answer with two decimal places.
| ARR = | % |
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