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Business strategies can interestingly be assimilated with medicinal drugs. There are no better or worse strategies. There are only adequately adopted business strategies or inappropriately selected and implemented strategies.
The accounting rate of return (ARR) is the percentage rate of return expected on investment or asset as compared to the initial investment cost. ARR divides the average revenue from an asset by the company’s initial investment to derive the ratio or return that can be expected over the lifetime of the asset or related project. ARR does not consider the time value of money or cash flows, which can be an integral part of maintaining a business.
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