have led to a drop in the required rate of return?

Q: What is the chief disadvantage of ROI as an investmentcenter performance measure? How does the…

A:

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: Why do you think the change in the index of labor cost per unit of output is a useful lagging…

A: A lagging indicator is an observable variable whose direction changes after the interest’s target…

Q: The excess present value method is anchored on the theory that the future returns, expressed in…

A: The excess present value method is also known as a net present value which required the present…

Q: Discuss the following components of break-even analysis: fixed costs, variable and semi-variable…

A: Break-even point: It is the point at which the contribution margin earned on sales is equal to fixed…

Q: Determine which of the following two alternatives is the most efficient and which is the most…

A: Internal rate of return (IRR) of an alternative refers to the rate at which the Net present value…

Q: Explain the differences and similarities between Return on Investment (ROI) and Residual Income (RI)

A: Return on investment (ROI): This financial ratio evaluates how efficiently the assets are used in…

Q: Which of the following will not result in an increase in return on investment (ROI), assuming other…

A: Return on investment (ROI): This financial ratio evaluates how efficiently the assets are used in…

Q: What causes the marginal rate of return to change over time?

A: Introduction: Marginal rate of return can be defined as the return attained or earned by holding a…

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 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: 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: what is meant by the required rate of return

A: The return which is expected to be earned by investing in a security is known as Required Rate of…

Q: Why is there typically a rise in ROI or residual income across time in a division? What undesirable…

A: Return on investment (ROI):   This financial ratio evaluates how efficiently the assets are used in…

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: What is the difference between an accounting break-even and a break-even NPV? Which will offer the…

A:

Q: What is meant by partitioning the internal rate of return? Why is this procedure meaningful?

A: Internal rate of return is defined as the annual rate of earnings on an investment and unlike income…

Q: How is it possible to achieve a higher rate of return without significantlyincreasing risk?

A: As we all learnes till now that higher the risk provides higher return and if we want the high…

Q: What is inverted (abnormal) yield curve?

A: An Yield curve, in general, is the plot of Interest rates versus the time to maturity of a Bond. It…

Q: The difference between the expected return and the actual return is referred to as the unexpected…

A: The excess amount over invested value that an investor estimates to realize over horizon of…

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: o you think a person would opt to use the Payback Period Method instead of the Net Present Value or…

A: Given information : . NPV refers to the difference between the sum of the present value of expected…

Q: How to incease profitability if PE Ratio, EPS Ratio, and ROE cannot be calculated because of its…

A: Accounting refers to the process of recording, summarizing, interpretation and communicating the…

Q: Why is an incremental analysis necessary when conducting a rate of return analysis for cost…

A: Incremental analysis considers only the relevant cash flows and it does not consider the…

Q: What does it mean when ROI has decreased even though net income hasincreased?

A: Return on investment (ROI): This financial ratio evaluates how efficiently the assets are used in…

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: 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: What is internal rate of return (IRR) method?

A: NPV shows the excess of PV of all the cash inflows over the initial outlay of the project. It is a…

Q: What is the difference between an accounting break-even and a break-even NPV? Which will offer the…

A: Break-even point = Total Fixed Costs / Contribution margin per unit   Break-even ratio = Annually…

Q: A realized return is the rate of return actually earned on an investment. Group of answer choices…

A: Return: Return is defined as the money attained or lost on an investment through certain time…

Q: 1. Define the components of holding period return. Can any of these components be negative? 2. How…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

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

A:

Q: What are the shortcomings of the payback period?

A: Payback period: The payback period assesses the time period required to recover the initial…

Q: Which of the following performance measures will decrease if the minimum required rate of return…

A: Return on investment is the return earned by the investment on its investment. It is computed by…

Q: The minimum acceptable rate of return for an investment decision is called the;

A: A project to become acceptable shall be as such the costs shall be recovered completely.

Q: Why do some people say that MIRR should stand for Meaningless Internal Rate of Return?

A: Question is based on the concept of Business Finance

Q: One of the advantages of Internal Rate of Return is:

A: The correct answer is b. It gives the closet rate of return.

Q: Explain an example how to calculate internal rate of return.

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