Many thanks for the exam resources can I please ask what is the difference between the Accounting rate of return and the internal rate of return.
Ask the Tutor ACCA MA
Capital Budgeting
7y ago#1The accounting rate of return is an accounting measure - the average profit per year as a % of the capital employed.
The IRR is a cash based measure and is the rate of interest at which the net present value is zero.
Both are explained in detail (with examples) in my free lectures on investment appraisal.
The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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