Definitions for

**"Average Rate of Return"**The ratio of the average cash inflow to the amount invested.

A method of evaluating capital investment proposals that focus on the expected profitability on the investment.

A technique used to estimate a rate of return. To compute this rate, investment outflows are subtracted from total investment inflows. The result is divided by the number of years the investment was held, and that result is divided by the total investment to arrive at the average annual rate of return.

Average tax rate Average up