a. Hurdle rate of return. d. Average rate of return. b. Payback rate of return. c. Internal rate of return. e. Break-even rate of return.
Q: Distinguish the nominal rate of return from the real rate of return.
A:
Q: Which of the following best represents the relationship between the weighted average cost of capital…
A: WACC is the weighted average cost of capital whereas MARR is minimum acceptable rate of return.
Q: What is the marginal rate of return? How is it calculated?
A: Answer: Marginal rate of return can be defined as the return obtained or received by means of…
Q: This method evaluates the return of an investment by dividing the annual average income by the…
A: By dividing the annual average income by the average investment, return on investment is calculated.…
Q: a. what is the difference between the discount rate used for net present value and the internal rate…
A: Discount rate used for net present value is rate which investor want to earn from a project . It is…
Q: Nhat is the exact rate of return?
A: The net gain or net loss of an investment over a predetermined time period is referred to as a rate…
Q: Why are the net present value and the internal rate of return models superior to the payback period…
A: The net present value and internal rate of return techniques are superior to the payback method…
Q: List and compare all advantages and disadvantages of Payback Period Rule, Average Accounting Return,…
A: Payback rule: The Payback period is the length of time required to recover the initial cost of a…
Q: The static GAP focuses on monitoring net interest income in the long term. Select one: True…
A: The Static GAP focuses on monitoring net interest income in the short term but it can be calculated…
Q: Evaluate the following statement: If the financial market is frictionless and complete, the asset…
A: A monetary market is where individuals might trade minimal expense monetary protections and…
Q: What is meant by the term abnormal rate of return?
A: Abnormal rate of return is return earned above or below the normal rate of return.
Q: The internal rate of return for Company A is close to
A: IRR is a discount rate that makes the net present value (NPV) of all cash flows equal to zero in a…
Q: What is limitation of Payback period, Net Present Value (NPV) and Internal rate of return (IRR).…
A: i) Payback period: Payback period is the expected time period which is required to recover the cost…
Q: The internal rate of return is: discount rate that makes the profitability index (PI) greater than…
A: IRR and PI are important tools of capital budgeting along with NPV. IRR refers to the internal rate…
Q: The break-even value calculation is similar to the calculation we use for theinternal rate of…
A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…
Q: The time weighted return is a method of measuring performance. Which of the following statements…
A: The time-weighted return method is a method to compute the compound rate of interest in portfolio…
Q: The modified internal rate of return (MMIR) is the discount rate that forces the _____.
A: Explanation: Modified internal rate of return can be better understood from the below formula, where…
Q: When npv is negative, the discount rate is greater than the actual return on investment. A.…
A: Net present value is the method used in capital budgeting to analyse various investments, projects,…
Q: What is a minimum attractive rate of return (MARR)?
A: Definition: Minimum Attractive Rate of Return (MARR): It is the minimum rate of return on the basis…
Q: Make a simple example of the following: a. Capital Gain (or Losses) b. Expected Return c. Real…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: What are the different terms used to refer to the rate of return?
A: Rate of return is an expected profit on an investment by a investor. It is a rate at which investor…
Q: A) What was your expected yield to maturity? B) What was your actual rate of return?
A: The yield to maturity (YTM) is the annual percentage rate of return on a bond if the investor…
Q: .Calculate (a) net present value, (b) payback period, and (c) internal rate of return.
A: Net Present Value is the excess of present value of cash inflow to that of present value of cash…
Q: Calculate the Payback period, Accounting Rate of Return and the Net Present Value (using a 17%…
A: Given:
Q: What is the formula for the following: Payback period. Net Present Value Internal Rate of return…
A: Accounting: Accounting is the art of recording, classifying and summarizing in a significant…
Q: What ROI will equate the PV of Inflows and the PV of outflows? a. Internal rate of return (IRR) b.…
A: Option b is incorrect because cost of capital means the cost that is incurred by the organization on…
Q: The rate of return that equates the present value of cash inflows and outflows is the: A. hurdle…
A: Introduction: Capital budgeting is an investment criterion or decision making mechanism for…
Q: The size of the investment required in Y is $ The rate of return on Y is | %.
A: Rate of Return: It is the return over a period of time made on the investment. Information…
Q: A centerpiece of any study of finance is "valuation." A simple function, "V=l/R," can be used to…
A: Valuation is the process of determining the present intrinsic value of an asset or a security.…
Q: nually. Investors required rate of return is ce
A: Coupon rate =8.47% T=7 Face value=50,000 Price=45,000 Yield to maturity = C +(face value…
Q: The fisher effect primarily emphasizes the effects of on an investor's rate of return
A: The fisher effect states that: Long term nominal interest rate = real interest rate + expected…
Q: The expected rate of return of an investment ________. a. equals one of the possible rates of…
A: Expected or average return is the return calculated by obtaining the mean value of a distribution.…
Q: What is a “required rate of return”? Why is it called the “cost ofmoney” or the “price of money”?
A: The required rate of return can be calculated by two methods, 1) Gordan's growth model Gordan's…
Q: Recognize the distinctions among yieldto maturity, currentyield, rate of return,and rate of…
A: Introduction: The terms yield to maturity & current yield are associated with bonds.Bonds are…
Q: The unadjusted rate of return on the Initial tnvestment would be approximately.
A: Calculation of average income: Year Net income 1 30000 2 45000 3 50000 4 55000…
Q: have led to a drop in the required rate of return?
A: Required Rate of return is the minimum rate of return which an investor expects for investing in a…
Q: Which method does not consider the time value of money? Choose the correct. A. Net present value…
A: Net Present Value or NPV is a technique which determines the net present value of the project and it…
Q: One of the advantages of Internal Rate of Return is:
A: The correct answer is b. It gives the closet rate of return.
The minimum acceptable
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- What is the difference between the discount rate used for net present value and the internal rate of return methods?Why are the net present value and the internal rate of return models superior to the payback period and the accounting rate of return models?The minimum acceptable rate of return for an investment decision is called the a. Hurdle rate of return. d. Average rate of return. b. Payback rate of return. e. Break-even rate of return. c. Internal rate of return.
- When npv is negative, the discount rate is greater than the actual return on investment. A. True B. FalseHow does the expected rate of return concept differ from that of the realized rate of return?Which one of the following is most closely related to the net present value profile? A: Payback B: Discounted payback C: Profitability index D: Average accounting return E: Internal rate of return
- Which of the following statements about payback (payback period) is most correct? a. Payback is a measure of time breakeven. b. Payback is a rough measure of risk. c. Payback is a rough measure of liquidity. d. Both a. and b. are correct. e. Answers a., b., and c. are all correct.What ROI will equate the PV of Inflows and the PV of outflows? a. Internal rate of return (IRR) b. Cost of capital rate c. The desired rate of return d. The minimum rate of return.What is the formula to find an expected in returns in CAPM
- What is the significance of finding the internal rate of return?Which method does not consider the time value of money? Choose the correct. A. Net present value B. Internal Rate of Return C. Average rate of return D. Profitability IndexList and compare all advantages and disadvantages of Payback Period Rule, Average Accounting Return, Internal Rate of Return, and Profitability Index.