Respuesta :
Answer:
11.82%
Explanation:
The formula to compute the average accounting rate of return is shown below:
= Annual net income ÷ average investment
where,
Annual net income is
= ($1,750 + $2,100 + $1,700) ÷ 3 years
= $1,850
And, the average investment would be
= (Initial investment) ÷ 2
= ($31,300) ÷ 2
= $15,650
Now placing these values to the above formula
So, the rate would equal to
= $1,850 ÷ $15,650
= 11.82%
We simply applied the above formula
The average rate of return is the proportion rate used in budgeting finances and is called the accounting rate of return (ARR).
The accounting rate of return can be calculated by the formula:
[tex]\rm ARR \% & = \dfrac{Annual \;net\; income} { Average \;investment} \times100[/tex]
The average accounting return is 11.82%.
The accounting return can be estimated as:
Computation of average accounting return can be done by:
[tex]\rm ARR& = \dfrac{Annual \;net\; income} { Average \;investment}[/tex]
Where,
[tex]\rm Annual \;net \;income = \dfrac {\$1,750 + \$2,100 + \$1,700}{ 3\; years}\\\\= \$1,850[/tex]
And,
[tex]\rm Average \;investment = \dfrac{(Initial\; investment)}{ 2}\\\\= \dfrac{(\$31,300) }{ 2}\\\\= \$15,650[/tex]
Replacing values in formula:
[tex]\rm ARR\;\% = \dfrac{\$1,850 }{\$15,650} \times100[/tex]
[tex]\rm ARR \;\% = 11.82\%[/tex]
Therefore, 11.82% is the ARR.
To learn more about the accounting rate of return follow the link:
https://brainly.com/question/10086721
