The annual average investment amount used to calculate the accounting rate of return is $68,000.
The average investment is the capital investment required to get the project off the ground plus the final scrap price of the machine divided by two. This is expressed as the average investment = (initial investment + disposal value) / 2.
Most investors consider an average annual return of 10% or more to be his ROI excellent for long-term investments in the stock market. Generally, his ROI of around 7% or more per year is considered a good ROI for a stock investment. This is also the inflation-adjusted average annual return of the S&P 500.
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