Why are rates of return superior to dollar returns when comparingdifferent potential investments?

Q: Which is the accounting rate of return using the average investment?

A: Summary of the relevant information as provided in the question : cost of investment =    £…

Q: Does the accounting (book) rate of return (ARR) method provide a valid (or, meaningful) measureof…

A:

Q: Explain the relationship between net present value and internal rate of return, and show how they…

A: Relationship Between Net present Value and Internal rate of Return

Q: What are the absolute measures of investment worth?

A: There are various approaches that can be utilized to decide a value or worth for the venture. Net…

Q: What is a satisfiable investment? When the present value of benefits surpasses the cost of an…

A: This question explains about the present value of benefits surpasses and the cost of an investment…

Q: Explain the Opportunistic Investing strategies?

A: Opportunistic investing strategies are strategies that involve investment in highly risky…

Q: Compare and contrast dollar returns and rates of return.

A: The returns from any investment can be calculated in terms of value (amount terms) or percentages.

Q: How do an investment's required rate of return vary with perceived risk? Explain with an example?

A: Required rate of return refers to the rate which the investors expects from their investments. This…

Q: This method evaluates the return of an investment by dividing the annual average income by the…

A: By dividing the annual average income by the average investment, return on investment is calculated.…

Q: what would be the purchasing power of the total return on their investment

A: Purchasing Power: Purchasing power refers to the actual power of buying the goods of services with…

Q: What would you choose? Other investment assets or Alternatives to fixed income and equities

A: Allocation of the investment is a much wider and troublesome task. the proper allocation may lead to…

Q: When considering multiple possible investments, why are rates of return preferable than monetary…

A: An investment's net profit or loss over a certain period expressed as a percentage of the…

Q: why net present value is considered to be superior to internal rate of return as an investment…

A: Investment- The purchase of an asset in order to generate income or capital gain is referred to as…

Q: Contrast investor's use of capital markets with their use of money markets

A: Capital market is basically the one where long term securities are brought and sold. Stock Market ,…

Q: Describe the Procedures used to determine the rate of return internal to nonsimple investments?

A: Procedure to compute the rate of return internal to non-simple investmentIt is an investment for…

Q: Discuss how the Accounting Rate of Return as an investment appraisal method is better than the Net…

A: Accounting ROR or ARR and Net Present Value(NPV) are tools that are used to make selection among…

Q: What role does the correlation what role does the correlation of two assets play in computation of…

A: The answer and the explanation can be seen below:

Q: Discuss the pros and cons of the accounting rate of return as an investment criterion.

A: Definition: Average rate of return method: The average rate of return is the amount of income that…

Q: What do you mean by rate of return on the investment?

A: What do you mean by rate of return on the investment?

Q: Identify two disadvantages of using the payback period for comparing investments.

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Q: Why may the net-present-value and internal-rate-ofreturn methods yield different rankings for…

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Q: Which among the following is a better investment products, bonds, stocks or investment funds?…

A: Investment fundIt is the pool of capital that the number of investors makes payment into, which is…

Q: Illustrate the market interest rate to find the net present worth?

A: Investors frequently find the present worth of the fund flows for the reason that savers receive the…

Q: If net present values are used to evaluate two investments that have equal costs and equal total…

A: Net Present Value is determined by discounting net cash flows by an appropriate required rate of…

Q: Identify two problems of comparing investments using the payback time.

A: This question explains about  investments using the payback time.

Q: Why are the net-present-value and internal-rate-of-return approaches ranked differently for…

A: This question explains about  the net-present-value and internal-rate-of-return approaches ranked…

Q: Is it okay to solve the payback period using the initial investment divided by the after-tax…

A: In the capital budgeting analysis, the payback period is an important method to determine the…

Q: Why are equity investments initially recognized at cost and valued differently at a subsequent…

A: Equity investments are those investments which are made by one person in some other company by…

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

A:

Q: What is the difference between future value and present value? Which approach is generally preferred…

A: Present value and future value are considered while taking investment decisions. The future values…

Q: What are Quoted Investments ?

A: Quoted investment: It is an accounting term for investment in share or debenture, which is quoted on…

Q: What would you choose? OTHER INVESTMENT ASSETS or ALTERNATIVES TO FIXED INCOME AND EQUITIES

A: Portfolio investments: Portfolio investment is the type of investment in which various types of…

Q: What is short-term, highly liquid investments?

A: Investments:   Companies invest in stocks and bonds of other companies or governmental entity to…

Q: Does the interest rate we use reflect the decision maker's lime value of money while comparing…

A: The time value of money is the idea of cash you currently have that due to its significant…

Q: What is Capital Asset Pricing and is it better then Dividend Valuation Model? If yes, on what…

A: The capital asset pricing model is an extension of the portfolio theory of Markowitz. It derives the…

Q: Would you expect positive covariances of returns between different types of assets such as returns…

A: Covariance is the measure of the degree to which two variables move together relative to their…