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What is the difference between the accounting rate of return (ARR) and the internal rate of return (IRR)?

April 26, 2017Accounting arr difference Internal irr rate of return

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What is the difference between the accounting rate of return (ARR) and the internal rate of return (IRR)?

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Students often confuse the ARR and IRR because they have similar letters in their acronyms. Both methods of investment appraisal give a value in percentage terms, but the similarity ends there.