Which of the following methods does not consider the investment’s profitability? a. ARR b. Payback c. NPV d. IRR

Q: Which capital investment methods require the use of a present value table?

A: Net Present Value: It is a measure of profitability for a project used primarily in capital…

Q: Explain how the cost of capital serves as a screening tool when using (a) the net present value…

A: Cost of capital:   Cost of capital is the required return necessary to make a capital budgeting…

Q: Explain several ways of defining the concept of rate of return on investment?

A: Return on investment is the tool that can be used to measure the performance of the companies.  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: 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: d. Explain why NPV is considered technically superior to Payback and Accounting Rate of Return (ARR)…

A: There are various capital budgeting methods that can be used to assess or evaluate various…

Q: Which of the following does not assign a value to a business opportunity using time-value…

A: Answer : D Payback period method

Q: The desired rate of return on an investment should reflect the degree of risk involved. A.   True…

A: Riskier investments may give higher returns to the investors as they provide favorable ratio of risk…

Q: Discuss the difficulties in using Net Present Value [NPV] as an investment appraisal method.

A: The net present value method is used by the company for the evaluation of the profitability of…

Q: ected rate of return concept differ from that of the rea

A: There are many method of valuation of stock based on expected rate and realized return and dividends…

Q: True or false. to apply the rate of return analysis correctly, we need to classify an investment i…

A: In the given question we need to answer whether the given statement is True or False.

Q: Explain what is meant by Accounting Rate of Return (ARR) and Net Present Value (NPV) in the context…

A: Solution:- Accounting Rate of Return (ARR):- It measures the expected profitability from any capital…

Q: 1. What is the gain on sale of investment using the FIFO approach?

A: LIFO is short for last in first out. it means the element which is inserted into the structure last…

Q: Which of the following should not be included as an application of the rate of return concept? rate…

A: As per the guidelines, only one question is allowed to be answered so, I am answering question no.…

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

A: The Answer :

Q: Why should the financial manager include opportunity cost but ignore sunk costs when evaluating a…

A: Capital investment is defined as an amount, which used to get invested in the corporation for…

Q: Which of the following are two methods of analyzing capital investment proposals that both ignore…

A: Which of the following methods of evaluating capital investment proposals? Following four methods…

Q: An investment should be rejected if the IRR is Group of answer choices - equal to the required rate…

A: Introduction: The internal rate of return (IRR) is a research and consulting metric used to assess…

Q: What are the principal objections to the use of the average rate of return method in evaluating…

A: Average rate of return: Under this method, the average net income is used in evaluating the capital…

Q: If the internal rate of return (IRR) is less than the cost of capital, then the investment is…

A: False If the internal rate of return (IRR) is less than the cost of capital, then the investment is…

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: Whenever you make an investment decision, you need to consider its impacts on the diversification of…

A: Investment decision and diversification go hand in hand. One should be careful while making an…

Q: The interest rate is the IRR for the mixed investment. True or false?

A: Project Balance (PB) is the amount of investment that is made into a project at any given period of…

Q: Explain the difference between return of investment versus return on investment.

A: The ratio analysis helps to analyze the financial statements of the business.

Q: Explain how differential weight to losses and gains effect investment decisions?

A: Prospect Theory assigns differential weight to losses and gains for making investment decisions.

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: ith the use of an example, briefly explain the main difference between the ex-ante and the ex-post…

A: Main Difference between ex-ante and the ex-post opportunity cost of capital: Ex-post risk is…

Q: __________ considers the impact of changing one or more inputs or assumptions on the resulting…

A: Capital budgeting is one of the important process of financial management. By this procedure,…

Q: What is the investment center manager's preferred technique of calculating investment turnover,…

A: It is a unit of a firm that is evaluated based on the usage of its capital rather than the profits…

Q: Considering the unequal investments, which of the following techniques would be most approprlate for…

A: Payback Period: It is the period in which the project recovers the cash outflow.   Net Present…

Q: “Explain the reasons why the net present value (NPV) method of investment appraisal is likely to be…

A: The Net Present Value (NPV) is a company's financial tool used to estimate the viability of…

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: 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: A reasonable probability that an investment will produce a loss a. risk b. value c. specualtion…

A: There are several investment styles through which one can generate profits or build wealth.

Q: In choosing where to invest, return and risk for an investment must be compared. It is not…

A: Return and risk are the different sides of the same coin. Both are directly related to each other.…

Q: If the internal rate of return (IRR) of a well-behaved investment alternative is equal to MARR,…

A: MARR is the minimum return the management requires from a project after adjusting the risks and…

Q: When using the benefit-cost ratio measure of worth (B/C), what benchmark is the calculated ratio…

A: Benefit Cost Ratio :— Benefit Cost Ratio are mostly Used in Capital Budgeting to analyse the Overall…

Q: The expected return on a riskless asset is greater than zero due to? A. an expected return for taxes…

A: Expected rate of return is the profit or loss on the investor that is assumed to be anticipated by…

Q: Which of the following investment appraisal techniques does not involve discounting? a. NPV b.…

A: Investment appraisal techniques are NPV, IRR, ARR, Payback period, discounted payback period,…

Q: What is meant by an investment project’s internal rate of return? How is the internal rate of return…

A:

Q: Describe the process of the Net-Investment Test?

A: The Net-Investment test is done to figure out if an investment is a 'Pure investment' or a 'Mixed…

Q: Capital Asset Pricing Model  a) describe the model b) what are the assumptions in the model c)…

A: The capital asset pricing model describes the relationship between the expected return and the risk…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.