Which type of average rate of return best describes the average annual rate of return earned over the period (the arithmetic or geometric)? Why?
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- What is the formula for the following: Payback period. Net Present Value Internal Rate of return Rate of ReturnHow does accounting rate of return (ARR) differ from the internal rate ofreturn (IRR)?Compute for the following: 1. Accounting rate or return based on the average investment 2. Net Present Value 3. Traditional Payback Period