The Accounting Rate of Return (ARR) is an accounting metric that measures the profitability of an organization by comparing the profit before interest and taxation to the capital employed over a specified period. Commonly used variants include profit after interest and taxation and average capital employed for the period.
The Accounting Rate of Return (ARR) is a financial ratio used to measure the expected profitability of an investment, defined as the ratio of average annual accounting profit to the initial investment cost.
Before-Tax Cash Flow (BTCF) represents the cash generated by an asset or a business before deducting income tax payments or adding income tax benefits. It's a critical measure for assessing an investment's or business's potential earnings and operational efficiency.
Cost-Benefit Analysis is a technique used in capital budgeting that evaluates the estimated costs against the expected benefits of a proposed investment.
The discounted value is the present worth of a future sum of money or stream of cash flows, given a specific rate of discount. It plays a critical role in various financial assessments.
The Internal Rate of Return (IRR) is a financial metric used to evaluate the profitability of an investment by calculating the rate of return where the net present value (NPV) of cash flows equals zero.
Net Present Value (NPV) is a financial metric that measures the value of an investment or project by calculating the present value of expected future cash flows, discounted at a specified rate.
The Profitability Index is a financial metric used to evaluate the profitability of an investment or project, calculated by dividing the present value of future expected cash flows by the initial investment.
