what are terms of reference in a project
Terms of reference Terms of reference (TOR) define the purpose and structures of a project, committee, meeting, negotiation, or any similar collection of people who have agreed to work together to accomplish a shared goal.[2] Although the terms of reference of a project are often referred to[by whom?] as the project charter[3], there are significant differences between the two. This article will describe the import of a TOR containing detailed definitions however, a project charter is defined as containing high-level requirements, assumptions, constraints and descriptions as well as a budget summary without detail and a milestone-only schedule. [4]
Accounting rate of return Accounting rate of return, also known as the Average rate of return, or ARR is a financial ratio used in capital budgeting.[1] The ratio does not take into account the concept of time value of money. ARR calculates the return, generated from net income of the proposed capital investment. The ARR is a percentage return. Say, if ARR = 7%, then it means that the project is expected to earn seven cents out of each dollar invested (yearly). If the ARR is equal to or greater than the required rate of return, the project is acceptable. If it is less than the desired rate, it should be rejected. When comparing investments, the higher the ARR, the more attractive the investment. More than half of large firms calculate ARR when appraising projects.[2]