Average Rate of Return
- Created by: Danni Algate
- Created on: 02-06-13 11:22
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- Average Rate of Return
- Step One
- Add each year's cash inflows (cummulativecashflow)
- Minus initial investment
- Add each year's cash inflows (cummulativecashflow)
- Step Two
- Average Annual Profit = cummulative cash flow / number of years
- Step Three
- AVERAGE ANNUAL PROFIT / INITIAL INVESTMENTx 100
- Step One
- INITIAL INVESTMENT = 10M POUNDS
- Year 1 = 4M
- Year 2 = 5M
- Year 3 = 6M
- Year 4 = 7M
- Year 5 = 5M
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