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Quiz: Average Rate of Return for Investment Decisions

AQA A-Level Business (7132)

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DaisyCreated by Daisy
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Steps in this lesson (12)

1
Text

Building on what you've learned about investment appraisal methods, let's test your knowledge of Average Rate of Return (ARR) for investment decisions!

2
Multiple ChoiceInteractive

What does the Average Rate of Return (ARR) measure?

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3
Math EquationInteractive

Calculate the Average Rate of Return if the total profit from a project is £50,000 and the initial investment is £200,000 over 5 years.

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4
Fill in the BlankInteractive

ARR is expressed as a {{blank0}} and shows the profitability of an investment by comparing the {{blank1}} to the initial investment.

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5
Multi-SelectInteractive

Which of the following are advantages of using ARR? (Select all that apply)

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6
MatchingInteractive

Match the items on the left with their correct pairs on the right

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7
typedAnswer

Match the items on the left with their correct pairs on the right

8
Multiple ChoiceInteractive

What is the main limitation of ARR?

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9
Math EquationInteractive

Calculate the Average Rate of Return: A project generates a total profit of £60,000 over 4 years, with an initial investment of £150,000.

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10
Fill in the BlankInteractive

The Average Rate of Return is typically used to evaluate if a project is {{blank0}} or worth pursuing.

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11
Multi-SelectInteractive

Which elements are required to calculate ARR? (Select all that apply)

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12
Multiple ChoiceInteractive

A business has two investment options: Project A offers an ARR of 8%, and Project B offers an ARR of 12%. Which project is more profitable?

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