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    Business A-Level

    average rate of return

    What average rate of return means in Business A-Level, as defined for AQA.

    Definitions of average rate of return

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    Reference: AQA

    Total net profit over the project's life divided by the number of years, then divided by the initial outlay and multiplied by 100.
    AQA · Annex: quantitative skills in business
    Divides the average annual profit by the initial cost and gives a percentage that can be set beside the cost of borrowing.
    AQA · Analysing strategic options: investment appraisal
    Average annual profit as a percentage of the initial investment, used to quantify the case where the data allows it.
    AQA · Making operational decisions to improve performance: increasing efficiency and productivity
    Average annual profit divided by the initial outlay times one hundred, quoted as a percentage.
    AQA · Assessing innovation

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