Rate of return Essays

Sort By:
  • Good Essays

    to use capital budgeting techniques to determine which projects are deserve for an investment. Projects that have higher return on a period of time will be choose to invest such as investment property, develop projects and potential long-term investments. Management will first assess the prospective of project's life time cash inflow and outflow to determine whether the return of the project will generate sufficient profit to make it worthwhile.

    • 2432 Words
    • 10 Pages
    Good Essays
  • Good Essays

    83% Did you use arithmetic or geometric averages to measure rates of return? We used arithmetic average to determine the annual rate of return. As rate of return calculated using arithmetic average gives higher return compared to geometric average, investors are more likely to estimate their future return based on arithmetic average measure. Hence we use arithmetic average to measure the rate of return to match the expected rate of return required by investors. What type of investments would you value

    • 1050 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    providing a benchmark before any further tactical or market timing positioning of securities. Diversification could occur across asset classes and geographically too meaning international stocks, allowing for construction of asset combinations with return and volatility characteristics that are acceptable to many investors with different risk tolerance levels and investment goals. When selecting securities to invest in another way of diversifying is to buy securities in the same asset class that are

    • 2255 Words
    • 10 Pages
    Powerful Essays
  • Good Essays

    Q3 - OE_Strengths What do you see as Delta’s particular strengths? "Their focus on returns on invested capital. Their management team. The variable expense structure that they 've created over the last seven years. Its relatively smaller penetration of unionized labor. Its leading presence at some of the strongest airport hubs in the country, namely Atlanta, JFK and LaGuardia. Its partnerships with international carriers as a way to decrease the capital intensity of running international, directly

    • 1025 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Pan Europa Case Study

    • 1078 Words
    • 5 Pages

    noteworthy to comment that while the capital spending of this project is under the capital spending limits of the company, it also brings diversity in the core business and is promissory in terms of market expansion. With the IRR of 28.7% and projected return of $134 million, accepting this project will provide substantial gain to the revenue figures and confidence of the shareholders. Therefore, on the basis of Equivalent Annuity, the projects will be ranked as follows: 1. Strategic Acquisition 2. Eastward

    • 1078 Words
    • 5 Pages
    Powerful Essays
  • Powerful Essays

    It forms part of the capital structure of the Company. It affects the firm’s capital structure, Interest rates, risks and the market’s overall attitude towards risk. The capital structure are sources of financing for business projects which can either be in form of debt or equity. Most small companies will opt for short term debt as opposed to large companies

    • 1561 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Gary Becker's Analysis

    • 2141 Words
    • 9 Pages

    in human capital by individuals .The position of the demand curve is determined by the rate of return to a particular person on each additional money unit of investment. The position of the supply curve shows the ejective marginal financing cost to him, measured by the rate of interest on each additional money unit invested. The person will go on investing in education until the rate of return equals the rate of interest, at which point an equilibrium (the desired level of education) is reached.

    • 2141 Words
    • 9 Pages
    Good Essays
  • Powerful Essays

    Tootsie Roll Case Study

    • 1047 Words
    • 5 Pages

    efficiently to produce profits. These ratios provide users of financial information with useful data such as how much net income is generated from each dollar of revenue and how much net income is generated per share of stock. Return on Sales

    • 1047 Words
    • 5 Pages
    Powerful Essays
  • Good Essays

    cutting back on redundant marketing costs? Couldn't we spare the cost for pediatric patients in developing countries by only cutting 12% of our profit margin? Couldn't we consider lowering the price for poorer tropical countries with higher morbidity rates, such as Nigeria and Gran Chaco, in order to bridge this gap? In my opinion, Allergan as a multibillion-dollar company, should have the most elementary moral obligation to sacrifice a slim of our profit and push towards higher levels of accessibility

    • 963 Words
    • 4 Pages
    Good Essays
  • Good Essays

    deal from a lender’s viewpoint. Interest must be paid before dividend. In case of liquidation, the debt finance is paid early before equity and this helps in making debt a safer investment than equity. Therefore, debt investors demand a lower rate of return than equity investors.  If external debt or equity is to be used, where should it be raised from and in which form? When it comes to equity finance, for some companies, the new shares must be offered to the existing shareholders in proportion

    • 904 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Hedge Fund Importance

    • 1549 Words
    • 7 Pages

    appropriate laws or regulations accordingly. 2. How Hedge Funds Seek Profits The following table proposes the annual returns and risks by hedge funds from 1996 to 2000. Most of the annual returns mark positive percentage, meaning that hedge funds had created huge amount of profits. The amount of returns depends on what kind of fund style hedge funds pursued. Table 1: Risks and Returns by Hedge Fund Category

    • 1549 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    lagging indicators, which measure the achievements against the goal. Formally the output of business activity is measured for a strategy is designed to achieve. For example, if the organization strategy calls for a 12 percent return rate, the outcome metric might be "return rate per month". They measure past activity that has already happened and cannot be changed. 2. Driver Metrics. Known as leading indicators and they are tactical metric. They measure business activity that influences the results

    • 1732 Words
    • 7 Pages
    Powerful Essays
  • Better Essays

    Program Bachelor of Arts (Honors) in Accounting and Finance N401 Module Financial Strategy 6AG522 Student Name Khaled Sweelat Student ID 058002581 Ford Motor Company Income Statement For the year ended 31st December 2000 (All values are in Million $) Total revenue 170,064 Less: Cost of revenue (126,120) Gross profit 43,944 Selling, general and administrative expenses 14,855 Other operating expenses 11,371

    • 2362 Words
    • 10 Pages
    Better Essays
  • Good Essays

    Harry Davis Case Study

    • 846 Words
    • 4 Pages

    have, rRF = risk-free rate RPM = market risk premium b = beta coefficient rs = rRF + (RPM)bi e. (1) Estimated cost of equity using discounted cash flow (DCF) approach: We have, = = = = 13.8%. e. (2) Another method for estimating growth rate: Another method for estimating the growth rate is to use the retention growth model: g = (1 - Payout Ratio) ROE In This is consistent with the 5% rate given earlier. e. (3) DCF method

    • 846 Words
    • 4 Pages
    Good Essays
  • Better Essays

    Materialism in the society General Topic (Subject): Materialism General Purpose : To inform Specific Purpose: To inform the audience why people became more materialistic. Central Idea: About materialism, the good and bad impact of being materialistic in the society. Method of Organization: Cause-Effect Introduction i. A fool and his money are soon parted. A foolish person usually spends his money carelessly. ii. Materialism worsens and petrifies everything, making everything hard

    • 943 Words
    • 4 Pages
    Better Essays
  • Good Essays

    investor off course. If you can ignore the noise and stay invested through good times and bad, you will be amazed at the wealth you can build. Another lesson I learned was that, it’s not necessary to take on a lot of risk in order to generate attractive returns. In life, we’re taught that success comes to those who work the hardest. With investing, it’s the opposite: the laziest people often reap the biggest rewards. If you are investing in a good company – if its earnings and dividends continue to rise

    • 856 Words
    • 4 Pages
    Good Essays
  • Good Essays

    1.5.5 Equity Joint Venture The joint ventures commitment varies from high to low, depending on the type of joint venture (i.e., minority, majority, or equity joint venture) (Hill, C. W. L., et al. 1990)." As reported by Coyle B. (2000, p. 6) a joint venture is a "business partnership in which two or more companies agree to invest […] in a particular business activity. The main purpose of many joint ventures is to create a strategic alliance between separate companies with common interests and complementary

    • 738 Words
    • 3 Pages
    Good Essays
  • Good Essays

    1 Define net price. How do you calculate the list price when the net price and trade discount rate are known? What are the steps to calculate the net price equivalent rate and then how to get the net price? What are the steps to calculate the single equivalent discount rate and then how to get the trade discount amount? Give an example of each net price equivalent rate and single equivalent discount rate. a) Define net price The net price is the final price after deducting all discounts and rebates

    • 741 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Master Budget Elements A master budget is an expectation, or a statement based on sales, volume etc. for an upcoming period (Shim, J. K., & Siegel, J. G. (2012). The master budget contains a pro forma income, a pro forma balance sheets, and a cash budget. Generally, a master budget is a plan or standard at the beginning, but it ends up amounting to a control device that helps to measure plans for management. This also helps management improve future performances. Budgeting can also help with the

    • 936 Words
    • 4 Pages
    Good Essays
  • Good Essays

    In this week’s lab we had to determine the density of a quarter, penny, and dime. My question was “How does is each coin?” Density is the amount of mass in an object. To find the density of each coin in this lab, we used a triple beam balance to find each coin’s mass and a graduated cylinder to find their volumes. With all this information, I can now form a hypothesis. My first hypothesis is if I put a quarter in a graduated cylinder and get the volume and weigh it, then it will have the greatest

    • 496 Words
    • 2 Pages
    Good Essays