Describe the process of the Net-Investment Test?

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: Create a classification of investment chart to distinguish between simple and nonsimple investment?

A:

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: Apply the procedure to find the true IRR, or return on invested capital, of the mixed investment?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: Define the term the working-capital investment?

A: The working capital is known as the net working capital which is the measure of the company’s…

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 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: Explain the types of investment risks with practical examples.

A: Investment risk - Investment risk is the probability of incurring losses from an investment made in…

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: e average rate of return on investment,

A: Average rate of return of investment = Average net income * 100/(Initial investment-Salvage value)

Q: Describe the Market-Value Analysis?

A: Market Value is a solid indicator of investor or shareholder capital. All things considered, what…

Q: Define the term investment pool?

A: Answer: Investment pools are noting but an institutional entities that are pooled investment…

Q: Which one of the following is an example of conventional form of investment?

A: Conventional investment categories includes trading investment options.

Q: What are investment returns?

A: Investment returns are a performance measure used to evaluate a speculation’s adequacy or to think…

Q: What is the total investment approach?

A: Total Investment Approach: In the Total Investment Approach, there is a risk-return tradeoff in the…

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: Explain Target Return on Investment?

A: Investments are done to get the return on the same. Generally, investments are done when an…

Q: Explain Estimating Development Cost and Interest Carry?

A: INTRODUCTION Estimating development cost in project management is the process of forecasting the…

Q: Which is the most accurate and commonly-used Investment Appraisal Method?

A: The profitability criteria of a project over the other can be considered by doing an analysis, that…

Q: Determine whether an investment is visible, which factors should be considered?

A: In terms of finance, the term feasibility of a project means to check if the project is economically…

Q: Describe the Investment-Pool Concept?

A: Investment pools are institutional elements that are pooled speculation structures, with the…

Q: In order to determine whether an investment is visible, what factors should be considered?

A: For the evaluation of a task, no fixed steps that have to be taken. Numerous things should be…

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: What is the relationship of risk to the investment?

A: There is a direct relationship between risk and return in investment decision making. It means…

Q: When is a project is said to be a net investment?

A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…

Q: Explain why risk and uncertainty should be considered in the investment appraisal process.

A: Investment appraisal process has to be a thorough and a comprehensive process in order to enable…

Q: How can I calculate the NPV of an investment?

A: Net present value:- Net present value is the investment evaluation technique, where we evaluate…

Q: Describe the Methods for Finding Rate of Return?

A: Capital budgeting is the process a company follows to decide whether to purchase a fixed asset or…

Q: What is the main determinant of the level of investment?

A: An investment is simply a financial instrument formed with the goal of allowing money to grow. One,…

Q: How do you make an investment decision based on the IRR?

A: IRR is the return actually earned by the investor and discount rate is the return which the investor…

Q: What will be Measures of Investment Performance Using Ratios?

A: It is always essential to evaluate the performance of the investments to decide whether the…

Q: Comment on the use of probability in investment decision process.

A: Use of probability is a very important tool when it comes to making decisions with regards to…

Q: Which investment return, expected or actual, does GAAP allow in the calculation of benefit cost?

A: Benefit cost: When an entity creates a benefit plan setting aside some moneys to meet future…

Q: Show and contrast how return on investment and residual income are used to evaluate the performance…

A: ROI  (return on investment =  ( Net Profit / Cost of the investment) X  100    Residual income =…

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: which investment vehicle is better

A: Investment vehicles are the ways in which investors can invest and seek to grow their investment…

Q: Which is the single most important criterion for investment decisions?

A: NPV computes the existing value of future benefits by discounting future cash flows with a given…

Q: What is return on investment?

A: Return on investment  is a financial ratio which is measured as net income divided by the cost of…

Q: Is the investment risk concerned with the range of possible outcomes from aninvestment?

A: For a business, there are many types of risks associated with it. Some of the risks are credit risk,…

Q: What are the main constraints or obstacles to implementing the investment management concept?

A: Investment management refers to the management of assets of an individual by the firm. It will…

Q: HOW TO KNOW THE RATIO OFCAPITAL INVESTMENT?

A: Ratio of capital investment is the ratio of net operating profit to total capital investment.

Q: What is e Direct Investment?

A: Direct Investment is an important concept in the world of finance. Direct investment is also…