Q: What does a failed net-investment test indicate?
A: Answer: Net investment test: The company will not overdraw at any stage on its return, and is thus…
Q: WHAT IS THE VALUE OF DISCOUNTED FLOWS
A: As per Time value of money, there are present values as well as future values.
Q: Define the term Risk-free real return?
A: Risk-free real return is a hypothetical number that mirrors the foreseen return on a venture that…
Q: Why is partitioning an internal rate of return important?
A: Introduction: There are two cash flow components which can form the portioning of internal rate of…
Q: What is the significance of the Value at Risk (VaR) method?
A: The question is based on the concept of Value at Risk (VaR). VaR is a statistical measure of risk in…
Q: a. what is the difference between the discount rate used for net present value and the internal rate…
A: Discount rate used for net present value is rate which investor want to earn from a project . It is…
Q: Which are the more complex applications of rate-of-return techniques/
A: The question is based on the concept of rate of return and its application in finance
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: Should the analyses show the sensitivity of the discounted net present value and other outcomes?
A: The question is based on the concept of a sensitivity analysis, used as a analysis tool in capital…
Q: What is the principal objection to the payback method?
A: The Payback period is one of the traditional or non-discounting techniques of Capital budgeting. It…
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: Why do most of the engineers prefer Rate of Return Analysis to the PW method?
A: Answer: They would be calculating the present worth of cash flows using a net present value…
Q: What are the shortcomings of the payback period criterion? Which of these shortcomings are accounted…
A: Payback method is a manner of evaluating capital projects which computes the time taken by the cash…
Q: How is the payback period determined?
A:
Q: Describe the strengths and weakness of payback method.
A: Definition: Payback method: Payback method refers to the method which measures the time period…
Q: Why do conflicts sometimes arise between the netpresent value (NPV) and internal rate of return(IRR)…
A: The basic assumption between NPV and IRR method is the cash flows are reinvested. In the NPV method,…
Q: What is the risk free return?
A: Rate of return is the return percentage which an investor gets from the money which has been…
Q: What are the considerations in imputing an appropriateinterest rate?
A:
Q: What is the difference between the possible returns and the expected return?
A:
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: What makes the risk-adjusted discount rate approach appealing?
A: Answer: The approximation of the present cash value for high risk assets is called adjusted discount…
Q: What are the Differences in Maturities?
A: Maturities in the context of the bond mean that bonds are issued for a specific period of time. It…
Q: What discount rate is used in a lessor’s NPV analysis?
A: Weighted average cost of capital is used as discount rate in Lessor's NPV analysis.
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: 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: What is the difference between YTD and YoY return? Provide an example
A: In the question they have asked regarding YTD and YOY differences between them so they will be…
Q: What makes the risk-adjusted discount rate approach appealing in practical application?
A: Answer: The discount rate may be changed to offset the risk involved in a project in order to…
Q: What is the decision rule for payback?
A: Payback period is the period of time taken by the project to recover the investment in such project…
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 conventional-payback method?
A: Conventional Payback Method
Q: What are some criticisms of the payback method?
A: Payback Period: Payback period is the period in which the project recovers its initial cost of the…
Q: Present the internal rate of return criterion and its strengths and weaknesses.
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…
Q: The expectations gap is
A: The Answer :
Q: /hat is the exact rate of return?
A: MACHINE A PV FACTOR PRESENTVALUE A 0 FIRST COST -8000 8000…
Q: What should be done to apply rate-of-return analysis correctly?
A: Rate of return: It can be defined as the rate of interest that has been earned by the company on the…
Q: What is hurdle rate?
A: Hurdle rate a rate usually used in capital budgeting decisions to calculate the acceptability 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: What are the weaknesses of the payback method? What other options do you have?
A: Pay back period is period required to recover initial amount of investment.
Q: What is the relationship between risk and return?
A: Risk return relationship: The association among risk and return is recognized as the risk-return…
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: have led to a drop in the required rate of return?
A: Required Rate of return is the minimum rate of return which an investor expects for investing in a…
Q: What are the weaknesses of the payback method?
A: Payback period is the amount of time required for firm to recover its initial investment in projects…
What are the shortcomings of the
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