This method establishes the relationship between the capital cost of a project and the profits accruing. The accounting rate of return is calculated by the following formula.

Advertisement

 

 

Average annual profit

——————————-     x     100

Average cost of investment

 

An average profit is calculated over the life of the project. The average cost of investment is calculated by adding the initial cost of the investment and the value at the end of its useful life divided by two.

Advertisement
The following two tabs change content below.
We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to [email protected]
0 Comments
  1. vagragenericaar.org 2 months ago

    Thank you.

    Youseful blog. Good post.

Leave a reply

Your email address will not be published. Required fields are marked *

*

*

BMS.co.in is aimed at revolutionising Bachelors in Management Studies education, also known as BMS for students appearing for BMS exams across all states of India. We provide free study material, 100s of tutorials with worked examples, past papers, tips, tricks for BMS exams, we are creating a digital learning library.

Disclaimer: We are not affiliated with any university or government body in anyway.

©2020 BMS - Bachelor of Management Studies Community 

A Management Paradise Venture

Ask Us On WhatsApp
or

Log in with your credentials

or    

Forgot your details?

or

Create Account