what is the difference between arr and internal rate of return irr 
the main difference between arr and irr is that irr is a discounted cash flow formula while arr is a non discounted cash flow formula arr does not include the present value of future cash flows generated by a project in this regard arr does not include the time value of money where the value of a dollar is worth more today than tomorrow the bottom linethe accounting rate of return arr is a simple formula that allows investors and managers to determine the profitability of an asset or project because of its ease of use and determination of profitability it is a handy tool to compare the profitability of various projects however the formula does not consider the cash flows of an investment or project or the overall timeline of return which determines the entire value of an investment or project 