What are some reasons that net PP&E might grow proportionally tosales, and what are some reasons that it might not?

Q: What is the profitability index? When is it used?

A: Capital investment analysis: Capital investment analysis is the process by which management plans,…

Q: Which one of the following statement is true about profit maximization? a It foc US or Ountina

A: 1. Profit maximization is the concept that focuses on maximising the profits. This concept ignores…

Q: What is nonconstant growth model?

A: Definition: The dividend paid to the stockholder is varying continuously at the higher side. The…

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 advantage does the Sharpe Ratio

A: Sharpe ratio is also known as Sharpes measure or reward to volatility ratio. It is the ratio…

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: Would the NPVs change if the cost of capitalchanged?

A: The NPV (Net Present Value) is entirely based on the value of the weighted average cost of capital…

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: 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: What are some possible financial decisions in which using the Present Value (PV) formula might be…

A: The present value (PV) is the current value provided a defined rate of return of a future amount of…

Q: Explain how did it get the NPV, the Economic Value Added (EVA), and the Market Value Added (MVA)

A: Capital budgeting is a process that is undertaken by an organization or business to evaluate…

Q: The potential percent gain or loss in changes of variable is taken into account by: A present worth…

A: Percent increase or decrease is such a measure of of change of percent which to extent measures…

Q: What is the market model? How is it different from the SML forthe CAPM?

A: The market model is utilized to show how forces of supply and demand powers cooperate to decide…

Q: What is Market Value Added (MVA)?

A: The market value added is the difference of the current value of the company and the equity capital…

Q: Does the IRR measure ignore the scale of investment?

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

Q: How might (a) seasonal factors and (b) different growth rates distort a comparative ratio analysis?…

A: Answer: For computing purposes, the ratio analysis uses different financial figures; the financial…

Q: Define the term Mixed-Dollar Analysis?

A:

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: Give an example of Mixed-Dollar Analysis?

A: Mixed-Dollar Analysis is commonly known as a currency basket that consists of different currencies…

Q: what are the sssumptions about market efficiency?

A: The theory that states that all the information available in the capital market is reflected in the…

Q: What is market efficiency? Differentiate between weak and semi strong form efficiency

A: Market efficiency is the ability of markets to process the information quickly and generate the…

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: 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 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: 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: 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: What is the crossover rate, and how does it interact with the costof capital to determine whether or…

A: The rate at which the net present value (NPV) of 2 ventures is equivalent is the crossover rate…

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: What is meant by investment yields?

A: Investment Yield:  It defined as Earnings or income which is earned on investment over the period of…

Q: Does the Present Value (PV) technique is based on return?

A: One of the important decisions that are taken by the management is to make the investment decisions…

Q: What is market Value added? What is economic value added? What is the difference between what each…

A: Market value added is the amount of wealth that the company is able to create for its stakeholders.…

Q: What does it mean to be at the optimal capitalstructure? What is optimized? What is maximizedand…

A: Introduction: Capital structure is nothing but the debt and securities that are included in the…

Q: What is the relationship between NPV and profitability index (PI)?

A: The concept of net present value is used to decide whether to invest in an investment or not. It is…

Q: Is a cap rate the same as an IRR? Which is generally greater? Why?

A: The capitalization rate or cap rate cant be considered as similar to the IRR or the internal rate of…

Q: Discuss Mixed-Dollar Analysis?

A: Consider the case where some components of the cash flow are expressed in constant (or current)…

Q: What is Net Present Value (NPV)?

A: Time value of money: Time value of money refers to the concept that the value of money available at…

Q: (b) Why might the usefulness of EPS (earning per share) be limited? Give reasons to support your…

A: The term for the dollar amount of the net income that has been earned by the owners of the common…

Q: what give rises to the changes in PBO balance?

A: PBO stands for the Projected Benefit Obligation. It shows how much the company would need in its…

Q: What is the Profitability Index?

A: Capital budgeting is the technique of evaluating a project which requires an initial capital…

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.