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Accounting: ROCE vs ARR.

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ARR (Accounting rate of return) and ROCE (Return On Capital Employed) both look at profit and compare it to the cost of the assets used to generate the profit.

However, they differ in one important way.

What is this difference and what are the two used to measure?

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Solution Summary

The problem deals with evaluating the difference between return on capital employed and accounting rate of return.

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ARR (ACCOUNTING RATE OF RETURN) AND ROCE (RETURN ON CAPITAL EMPLOYED)

ARR (Accounting rate of return) and ROCE (Return on Capital Employed) both look at profit and compare it to the cost of the assets used to generate the profit.

However, they differ in one important way.

Question:
What is this difference and what ...

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  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
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