Asked by

Aminah Barrett
on Nov 17, 2024

verifed

Verified

Average rate of return equals average investment divided by estimated average annual income.

Average Rate of Return

A calculation to determine the profitability of an investment, measuring the average annual return over the investment's lifespan compared to the initial cost.

Estimated Average Annual Income

The projected amount of money one expects to earn on average each year, often used for budgeting and planning purposes.

Average Investment

An approach in accounting that calculates the mean value of various investments held by an entity over a specific period of time.

  • Be able to define and calculate the average rate of return and understand its significance.
verifed

Verified Answer

MC
Madison CoslowNov 21, 2024
Final Answer:
Get Full Answer