Distinguish the nominal rate of return from the real rate of return.

Q: What is market value ratio?

A: Ratio is the relation between two different quantities obtained after dividing one by another.

Q: Required: a. Determine the discounted rate of return.

A: Formula: Discount rate= Lower Rate +Lower NPV×Higher Rate-Lower RateLower NPV-Higher NPV

Q: Differentiate between price risk and reinvestment risk.

A: Price risk is the risk of decline of the price of the investment or an asset after the underlying…

Q: Which are the Methods for Finding Rate of Return?

A: A Rate of Return (ROR) is the gain or loss of an investment over a certain period of time. When the…

Q: Compare and contrast dollar returns and rates of return.

A: The returns from any investment can be calculated in terms of value (amount terms) or percentages.

Q: How can we calculate the Times-Interest-Earned Ratio?

A: Times Interest Earned Ratio:  It is one of the solvency ratios. It is a measure to evaluate the net…

Q: Define the term internal rate of return?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

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: Calculate the accounting rate of return of the new sign. Accounting rate of return %

A: Accounting Rate of Return The accounting rate of return (ARR) formula is helpful in determining the…

Q: Define the term Risk-free real return?

A: Risk-free real return is a hypothetical number that mirrors the foreseen return on a venture that…

Q: Define return rate

A: The return rate can be calculated on various assets and can be used to compare various investments.…

Q: What is the internal rate of return?

A: Internal rate of return is the discount rate at which present value of cash inflows equals outflows…

Q: e average rate of return on investment,

A: Average rate of return of investment = Average net income * 100/(Initial investment-Salvage value)

Q: How to calculate Present Value Interest Factors?

A: PVIF is known as Present Value Interest Factor. PVIF refers to a factor that is very useful in…

Q: Identify the MARR (or external interest rate)?

A: A minimum acceptable rate of return (MARR) is the all-out advantage that a speculator wants to pick…

Q: What is the Relationship between the Incremental Cost and the Loan-to-Value Ratio?

A: The question is based on the concept loan to value ratio and its relationship with incremental cost.

Q: What is the significance of finding the internal rate of return?

A: IRR helps to check the viability of the project. If IRR is more than Kc than Project seems to be…

Q: Please explain the difference between the terms interest rate and required return by defining each.

A: The amount which is charged by the lender to the borrower in order the use assets is known as the…

Q: difference between internal rate of return and net present value?

A: Difference between internal rate of return and net present value?

Q: Which different terms are used to refer to rate of return?

A: Rate of return is the return that is expected by the investors from the investment made. It is…

Q: Describe the process of using the risk-adjusted discount rateto calculate the net present value?

A: Net present value (NPV) is the excess of present value of cash inflows over the present value of…

Q: Interest cost is calculated by multiplying the______by the ______?

A: Interest cost is calculated by multiplying the  Principle amount by one plus the annual interest…

Q: Define the term Discounted-Payback Period?

A: The payback period states the number of years that is taken by the project to recover the investment…

Q: What is payout period and how is it calculated?

A: Companies employ various methods in the process of selection of the most financially appropriate…

Q: Compare the mutually exclusive alternatives based on the rate of return?

A: Mutually exclusive projects are the projects out of which one best project is selected due to lack…

Q: What do we mean by internal rate of return (IRR)?

A: Internal rate of return : Internal rate of return is one of the techniques used in capital budgeting…

Q: Describe the rules of accounting rate of return.

A: The accounting rate of return (ARR) is the percentage rate of return expected on investment or asset…

Q: How does accounting rate of return (ARR) differ from the internal rate ofreturn (IRR)?

A: Introduction: Capital budgeting is an investment criterion or decision making mechanism for…

Q: Explain different terms are used to refer to rate of return?

A: Answer: Rate of return is nothing but the returns that are expecting on investments made by…

Q: Explain real rate of return

A: This is the raw rate of return adjusted with inflation. It is used to ascertain the effective return…

Q: Distinguish between the initial rate of interest and the expected yield on an ARM. What is the…

A: Introduction: The adjustable rate mortgage is one of the method used to calculate the interest rate…

Q: Define real rate of return.

A: Real Rate of Return is defined as the rate that has been adjusted for rise in prices of commodities.…

Q: Describe the Methods for Finding Rate of Return?

A: Capital budgeting is the process a company follows to decide whether to purchase a fixed asset or…

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: Describe the method of developing a Present Worth Distribution?

A: Present value or Present Worth of an investment or a project is the value of future cash flow…

Q: what is the difference between a required rate of return and an expected rate of return?

A: Rate of return (ROR) is a value at which an investor earns additional amount on invested amount…

Q: How is the payback period is calculated?

A: Payback period is the amount or length of time taken by an investment to recover its cost.

Q: Define realized rate of return

A: Return can be defined as the profit or interest earned by the investor on the investment, which…

Q: What four fundamental factors affect required rates of return(i.e., the cost of money)?

A: The minimum rate that is expected by an investor from the investment made in a project is referred…

Q: What is the relationship between a discount rate (or IRR) and a capitalization rate? What causes…

A: Introduction: The discount rate is nothing but a rate that reduces potential cash flows in order to…

Q: What is meant by the term payback period?

A: The Payback Period helps to determine the extent of time required to recoup the initial cash outlay…

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: How is NPW used as a Function of Interest Rate?

A: Present value computes the existing value of future benefits by discounting future worth with a…