Search results
Results from the WOW.Com Content Network
The accounting rate of return, also known as average rate of return, or ARR, is a financial ratio used in capital budgeting. [1] The ratio does not take into account the concept of time value of money. ARR calculates the return, generated from net income of the proposed capital investment. The ARR is a percentage return.
Where the individual sub-periods are each equal (say, 1 year), and there is reinvestment of returns, the annualized cumulative return is the geometric average rate of return. For example, assuming reinvestment, the cumulative return for four annual returns of 50%, -20%, 30%, and −40% is:
Return on investment (ROI) or return on costs (ROC) is the ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time). A high ROI means the investment's gains compare favourably to its cost.
My favorite drug company, Valeant Pharmaceutical , has returned 72% annually over the past five years. That's more than three times the average return of the industry. And it's not the result of a ...
For premium support please call: 800-290-4726 more ways to reach us
The rate of return on a portfolio can be calculated indirectly as the weighted average rate of return on the various assets within the portfolio. [3] The weights are proportional to the value of the assets within the portfolio, to take into account what portion of the portfolio each individual return represents in calculating the contribution of that asset to the return on the portfolio.
For premium support please call: 800-290-4726 more ways to reach us
The average rate of return on a 401(k) ranges from 5% to 8%. However, the typical 401(k) holds a mix of roughly 60% stocks and 40% bonds, so it’s also subject to the whims of the larger marketplace.