alleryStart learning →Total profit after tax is Rs 90,000 over 5 years. Average annual profit?
ARs 9,000
BRs 15,000
CRs 18,000
DRs 45,000
Answer & Solution
Correct answer: C. Rs 18,000
Average profit is profit after tax divided by the life of the investment: 90,000 / 5 = Rs 18,000.
Keep practising Accounting Rate of Return
Browse all Accounting Rate of Return questions for CA Inter, or explore more Financial Management topics.
Related questions
Which measures do economists prefer over payback for return?Rs 9,00,000 is invested and net cash flow is Rs 1,80,000 a year. Payback?A: profit Rs 40,000 on average investment Rs 2,00,000. B: Rs 54,000 on Rs 3,60,000. HigherCost Rs 12,00,000 and scrap Rs 2,00,000. Average investment under ARR?Cost Rs 3,00,000, scrap Rs 60,000, 4 years, total profit Rs 1,44,000. ARR?Which goal underlies capital budgeting in corporate finance?Capital budgeting mainly concerns which type of spending?Companies create value when their return on capital is above what?