The accounting rate of return method is sometimes referred to as the average annual return on investment method. When this method is used to evaluate an investment pro- posal, the estimated accounting rate of return on the investment is compared with a tar get rate of return. If more than one project exceeds the target rate of return and funds are insufficient to finance all qualified projects, the acceptable projects are ranked and only the most profitable ones selected. The estimated rate of return for the Milski Corporation project is computed as follows: