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understanding concept of advantanges and disadvantages of ARR,NPV,IRR

This topic has 1 reply, 2 voices, and was last updated 2 years ago by John Moffat.

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April 3, 2023 at 8:29 am #682176
TAUQEER199625
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sir i did not understand how “the expected profitability of a project can be compared with the present profitability of a business” is an advantage of ARR.
April 3, 2023 at 5:57 pm #682188
John Moffat
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It is a profit measure, and so if the company is concerned about the profitability of the company they can check whether the profit from the investment is going to increase the current profitability (the return on capital employed) of the company or not.
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