The internal rate of return equals the rate that yields a profitability index of 1 for an investment. O True O False
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A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…
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Q: Which of the following is the correct definition for present value (PV)?
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Q: The most accurate way to analyze the profitability of an investment is to compute the payback…
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Q: Calculate the average rate of return on the investment.
A:
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Q: te
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Q: The minimum acceptable rate of return for an investment decision is called the;
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Q: Is the accounting rate of return (ARR) the same thing as the return on investment (ROI)?
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- Which one of the following is an indicator that an investment is acceptable? Check all that apply: Profitability index equal 1.5 Profitability index greater than 0 the required return less than internal rate of return IRR equal to zero Payback period exceeds the required period Profitability index equal 1This calculation determines profitability or growth potential of an investment, expressed as a percentage, at the point where NPV equals zero. Group of answer choices A. internal rate of return (IRR) method B. net present value (NPV) C. discounted cash flow model D. future value methodWhich 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
- The expected rate of return of an investment ________. a. equals one of the possible rates of return for that investment b. equals the required rate of return for the investment c. is the mean value of the probability distribution of possible returns d. is the median value of the probability distribution of possible returns e. is the mode value of the probability distribution of possible returnsMatch each term with the best definition or descriptor. NPV is __________ ( a unitless ratio, a unit of time, a dollar vallue, or a rate of return). IRR is ___________ ( a unitless ratio, a unit of time, a dollar vallue, or a rate of return). Profitability index is __________( a unitless ratio, a unit of time, a dollar vallue, or a rate of return).Compute for the following: 1. Accounting rate or return based on the average investment 2. Net Present Value 3. Traditional Payback Period
- n is the number of periods of an investment, PV is the starting value, FVn is the future value n periods ahead, and ^ means 'to the power of'. What is the correct formula for calculating return? a)(PV/FVn)^n - 1 b)(FVn/PV)^n c)1 - (FVn/PV)^n d)(FVn/PV)^n - 1Which of the following correctly orders the investment rules of average accounting return (AR), internal rate of return (IRR), and net present value (NPV) from the most desirable to the least desirable? a. IRR, AR, NPV. b. AR, IRR, NPV. c. NPV, AR, IRR. d. AR, NPV, IRR. e. NPV, IRR, AR.The most accurate way to analyze the profitability of an investment is to compute the payback period. A. True B. False
- A realized return is the rate of return actually earned on an investment. Group of answer choices True FalseIf the internal rate of return (IRR) of a well-behaved investment alternative is equal to MARR, which of the following statements about the other measures of worth for this alternative must be true? i. PW = 0 ii. AW = 0. Solve, a. I onlyb. II only c. Neither I nor II d. Both I and II.When npv is negative, the discount rate is greater than the actual return on investment. A. True B. False
