Average rate of return
What Average rate of return means in Business GCSE, as defined for AQA, Pearson Edexcel.
Definitions of Average rate of return
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Reference: Pearson Edexcel
Evaluates investments by comparing average annual profit to the initial cost: (average annual profit / initial investment) × 100.
A measure that compares average annual profit with the initial outlay, expressed as a percentage.
Measures the average annual profit an investment generates as a percentage of its initial cost.
Topics that use Average rate of return
- Financial terms and calculations (AQA GCSE)
- Business calculations (Pearson Edexcel GCSE)
Related terms
- Average annual profit
- Average Rate of Return (ARR)
- Break-even
- Break-even chart
- Break-even level of output
- Break-even output
- Break-Even Point
- Cost of sales
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