If the net present value of a proposed investment is positive

Q: Can I calculate the Rate of Return using the NPV/initial investment? Why or why not?

A: When an investment is made in a certain project, its future outcomes are measured based on the money…

Q: Describe the Project Cost of Capital: Risk-Adjusted Discount Rate Approach?

A: The cost of capital is the return required to make a capital budgeting venture advantageous, for…

Q: what is the discounted payback period for the investment?

A: Payback Period is the calculation of periods or years within which cost of investment is recovered.…

Q: Assuming that your capital is constrained, which project should you invest in last?

A: Here we will have to use the PI (profitability index) ratio. We know that profitability index = 1 +…

Q: present worth of this investment.

A: We can populate the cash flows as below and calculate the NPW. Pls note that 24% compounded monthly…

Q: What is a satisfiable investment? When the present value of benefits surpasses the cost of an…

A: This question explains about the present value of benefits surpasses and the cost of an investment…

Q: When do the firm expect to recover the initial investment?

A: The payback period alludes to what extent it takes for a speculator to hit breakeven to recoup the…

Q: What are the two sources of value in an investment?  Given an example of each.

A: An investment is a process where the investors gives or outlays his or her capital in return of…

Q: Why is it necessary to determine how long you can expect to reap benefit from the investment?

A: Individuals as well as firms often make investment and specify the time limit for which this…

Q: what would be the purchasing power of the total return on their investment

A: Purchasing Power: Purchasing power refers to the actual power of buying the goods of services with…

Q: /hat is the internal rate of return of the proposed project?

A: IRR(INTERNA RATE OF RETURN), is the rate that equates the present value of cash flows and the future…

Q: Evaluate the net present value of the investment at the company's MARR. State w

A: Net present value(NPV) is the capital budgeting method used for finding the profitability of the…

Q: why net present value is considered to be superior to internal rate of return as an investment…

A: Investment- The purchase of an asset in order to generate income or capital gain is referred to as…

Q: What are the best short-term and long-term investment strategies going forward into the future?

A: Short term investment strategy – Those investment that are usually traded for upto a span of 3 years…

Q: r expected return on this investment?

A: Expected return on investment refers to the rate of return that an investor is expecting on an…

Q: Suppose you know that an investment will earna positive return in the future. Why is it important to…

A: The investment may provide a positive return in the future, but the worth of receiving it in future…

Q: A particular investment's rate of return is referred to as a "return on investment.

A: In response to the question The phrase "financial market" refers to items that are often seen in the…

Q: Give an example of a liquid investment and an illiquid investment. Discuss why you consider each of…

A: In finance, the term investment represents a financial technique to allocate surplus funds into an…

Q: Explain Target Return on Investment?

A: Investments are done to get the return on the same. Generally, investments are done when an…

Q: The net present value of an investment represents the difference between the:

A: The Answer :

Q: Calculate the average rate of return on the investment.

A:

Q: Describe the concept applied to the creation of an investment project portfolio?

A: The question is based on the concept of creation of portfolio for investment , which is combination…

Q: Consider IRR on Incremental Investment when Initial IRR Flows are equal?

A: Answer: IRR is a measure in capital budgeting used to measure the value of the predicted…

Q: What do you mean by rate of return on the investment?

A: What do you mean by rate of return on the investment?

Q: Describe IRR on Incremental Investmentment When InitialFlows are equal?

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

Q: What are the shortcomings of the internal rate of return criterion? How do you make an investment…

A: Internal rate of return is the discount rate at which the present value of the future cash flow and…

Q: Which of the following methods does not consider the investment’s profitability? ARR Payback NPV…

A: Average rate of return (ARR) and Internal rate of return (IRR) are methods of computing rate of…

Q: How can I calculate the NPV of an investment?

A: Net present value:- Net present value is the investment evaluation technique, where we evaluate…

Q: How do you make an investment decision based on the IRR?

A: IRR is the return actually earned by the investor and discount rate is the return which the investor…

Q: For a capital investment project to be acceptable, it must generate a rate of return  A) Less than…

A: The correct answer id Option (B).

Q: Describe the process of Incremental-Investment Analysis?

A: The question is based on the concept of Incremental analysis, the method is a problem-solving…

Q: The minimum acceptable rate of return for an investment decision is called the a. Hurdle rate of…

A:

Q: Is the investment risk concerned with the range of possible outcomes from aninvestment?

A: For a business, there are many types of risks associated with it. Some of the risks are credit risk,…

Q: Generally, investors expect that projects with high expected net present values also will be…

A: Introduction: NPV or net present value is one of the capital budgeting techniques used by companies…

Q: What is the typical discount rate used with the Net Present Value (NPC) when project risk is the…

A: The net present value (NPV) is the discounted value of benefits less the initial costs. The values…

Q: onsider the following tw

A: A. Standard deviations and coefficient of variation can be computed as follows :

Q: The payback period for the investment would be: (Ro

A: Capital budgeting: capital budgeting is a decision-making method done by management accountants in…

Q: Which of the following statements is true about the internal rate of return?   a. It is the…

A: The internal rate of return is a financial measure used to measure the attractiveness of a…

Q: Compare short-term and long-term investment strategies.

A: Investment strategies can be defined as those strategies which consist of various methodologies and…

Q: Explain Yields on Investment Annuities?

A: The question is based on the concept of calculation yield, which describes the  returns to the…

Q: Calculate the internal rate of return of each investment opportunity. Daced

A: Internal Rate of Return(IRR) is one of the capital budgeting techniques used for finding the…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.