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

Q: What is the Importance of the Profit Ratio?

A: Profit ratio: Profit ratio is utilized to assess the corporation's capacity to make revenue as…

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: 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 are the Profit margins?

A: Answer: Profit margin represents a product, company or sector profitability. It nothing but the…

Q: financial variables that affect the price-earning ratio

A: The price-to-Earning ratio is derived by dividing the Market Price of Share by Earning Per Share.…

Q: why it is important to use profitability ratios

A: Ratio analysis is an evaluation tool used by the businesses with a view to obtain knowledge about…

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: Briefly explain the difference between liquidity, solvency, and profitability analysis.

A: Financial ratios are the metrics used to evaluate the liquidity, profitability, solvency and overall…

Q: on. What is the maximum profit possible?

A: In the given question, we have to compute maximum possible profit out of the given availability of…

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: Explain price/cash flow ratio

A: Answer: Price to cash flow is determined through the division of price per share by cash flow per…

Q: How to calculate the Profitability index?

A: Profitability Index: It is a measure used in capital budgeting of the project's or investment's…

Q: What is operating profitability ratio (OP)?

A: These ratios evaluate a firm’s ability to earn profits. They help the stakeholders of the company to…

Q: What is the relationship between profitability and efficiency, liquidity, investment, and efficiency…

A: (1) Financial Ratios will express financial Quantity concerning another financial ratio. (2) These…

Q: What is current market value? Describe about it.

A: Market value: Market value is the price at which, both seller and buyer agree to exchange the…

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: What are the benefits of Profitability Analysis?

A: Profitability analysis is a tool used by the firm to analyze cost and revenue to know whether the…

Q: What is market approach measurement?

A: The market approach is just like comparing one set of assets with another both having the same…

Q: Define each of the following terms: c. Net present value (NPV) method; internal rate of return (IRR)…

A: Net present value (NPV) is the contrast between the present value of money inflows over some…

Q: What is operating profit margin?

A: The operating profit is the profit earned during the year after deducting all the operating expenses…

Q: What would be the expected change in profit?

A: "Contribution Margin: The Contribution Margin is also can be treated on a gross or per unit basis.…

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: 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: Give some examples of the market-value ratios?

A: Market value ratios may include various types of ratios which indicate the value of company’s share.…

Q: What is target profit?

A: Target costing:   Target costing is a business procedure that targets the cost at the earliest…

Q: What are the measures of investment worth based on yield? What are they called?

A: Investment worth based on yield means that an investor is expecting certain income on an investment…

Q: What is net profit margin?

A: The margin of net profit is equal to the amount of income produced by the net sales or gains. For a…

Q: What is Profitability analysis?

A: Profitability analysis is an important measure for the business to analyze the company's ability in…

Q: What are the different profitability ratios?

A: Profitability ratios are the measure which is used to depict the profitability position of the…

Q: what are the assumptions about market efficiency ?

A: Market efficiency refers to the market situation where stock prices reflect all available &…

Q: Define “Market Value Added (MVA)” and “Economic Value Added(EVA).”

A: Introduction: Economic value added (EVA) and Market value added (MVA) are computations utilized to…

Q: What is gross profit margin?

A: The method to analyze the performance of a company through its profitability is term as the…

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: How is Profit Margin calculated and what does It measure?

A: Note: Since you have asked multiple questions, we will solve the first question. To get the…

Q: Perform a profitability analysis

A: Profit is very important element of the business. Every business wants to have maximum profit in its…

Q: Define solvency and profitability. How are they alike?

A: Answer: Solvency is status of company when the asset is higher than liabilities. Profitability  is…

Q: What ROI will equate the PV of Inflows and the PV of outflows? a. Internal rate of return (IRR) b.…

A: Option b is incorrect because cost of capital means the cost that is incurred by the organization on…

Q: Define the terms market value added (MVA) and economic value added (EVA).

A: The concept of economic value added was developed by Stern Stewart & co & is also known as…

Q: Describe the use of profitability index.

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

Q: What is meant by the terms margin and turnover in ROI calculations?

A: ROI( Return on investment) is a performance measure used to measure the efficiency of an…