Accounting Rate of Return - ARR
ARR provides a quick estimate of a project's worth over its useful life. ARR is derived by finding profits before taxes and interest.
Investopedia Commentary
ARR is an accounting method used for purposes of comparison. The major drawbacks of ARR are that it uses profit rather than cashflows, and it does not account for the time value of money.
See also: Cash Flow, Future Value, Interest, Present Value, Profit, Time Value of Money
Also spelled: ARR