which one should be selected in the following cases? (1) When MARR = 4% (2) When MARR = 8%

Q: Determine the ERR (External rate of return) of the cash flows if external rate (e) is given as %10.

A: External rate of return is the modified form of internal rate of return in which it is assumed that…

Q: b) The appropriate hurdle rate for comparison with IRR is that which makes the sum of the discounted…

A: The hurdle rate or minimum acceptable rate of return (MARR) is the minimum required rate of return…

Q: The internal rate of return measures the:   Select one:   a. discount rate that the firm uses in…

A: The internal rate of return, also known as the discounting rate, makes discounted future cash flows…

Q: The formula below shows the computation of a future value for a series of cash flows. Your task is…

A: The movement  in and out of money in a business is referred to as cash flow. Cash received denotes…

Q: Question 3: An investment yields expected future cash flows of $21.00, $34.00, $40.00, $33.00, and…

A: The following computations are done to evaluate the investment as per the time period.

Q: The annual growth rate of your investment can be measured by A. THE ANNUAL MEAN OF YOUR ANNUAL…

A: Several methods have been prescribed to measure the annual growth rate of an investment. We have to…

Q: A project is being analyzed with the following set of cash flows. Calculate the internal rate of…

A: YearCash flow0-$16,0001$6,7002$8,0003$6,500

Q: If you perform a NPV analysis on a perspective investment using a "d" = 15% and:       a. the…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: Below is the schedule of cash flows for Investment PEK and Investment PVG. Using the NPV, and IRR…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: Determine, using Capital Assets Pricing Model (CAPM), the Expected Rate of Return Risk free rate was…

A: In this question we need to calculate the expected return of Asset B from following details : Risk…

Q: The capital investment committee of Arches Landscaping Company is considering two capital…

A: Net Present value is present value of cash flow minus initial investment

Q: Three mutually exclusive investment alternatives are under consideration. The initial capital…

A: NPV and IRR are two discounted cash flow methods used for evaluating investments or capital…

Q: Review the table below listing performance metrics for selected assets. The metrics are defined in…

A: The table provides performance metrics for four assets: a riskless asset, the market portfolio, and…

Q: Consider two investments A and B with the sequences of cash flows given in the table below. Click…

A: IRR is also known as Internal rate of return. It is a capital budgeting techniques which help in…

Q: The accounting rate of return (also known as the unadjusted rate of return) can be calculated as

A: The Accounting Rate of Return (ARR) is a financial metric used to evaluate the profitability or…

Q: Consider two assets with the following cash flow streams:   Asset A generates $4 at t=1, $3 at…

A: Given: r = 0.2 or 20% PV of asset B = 12 Cash flow for Asset B: t1 = $2 t2 = $X t3 = $10

Q: 1 2 Growth rate 3 Discount rate 4 A B F NPV, DISCOUNT AND GROWTH RATES 10% 15% $500 $100 Initial…

A: Net present value (NPV) is a technique used in capital budgeting, where NPV is determined using time…

Q: Compute the Payback Period, Discounted Payback Period, Net Present Value, Internal Rate of Return,…

A: Capital projects are those that are spread across several years and requires a significant initial…

Q: International Fabric, Inc. must decide which type of fabric cutting machines it will use - Machine A…

A: we will find the equated annual cost of both machinery A and B and will select the machinery which…

Q: Below is the schedule of cash flows for Investment PEK and Investment PVG. 1. Using the NPV, and IRR…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: The series of returns of a single investment are presented as follows; Beginning value 100 115.0…

A: Given: Variables in the question: YearBeginning ValueEnd Value1100.0115.02115.0138.03138.0110.4

Q: Calculate the HPR of the following investment, entered as a percentage (Example: if your answer is…

A: HPR stands for Holding Period Return, which is a measure used to calculate the return on an…

Q: Solve the attachment.

A: Cash flow: Cash flow refers to the amount of cash and cash equivalent which flows in and out of the…

Q: Pls help ASAP

A: Money market refers to a debt market that is very short-term in nature the maturities of money…

Q: ssume that an investment is forecasted to produce the following cash flows: a 10% probability of…

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A: A risk premium is the additional return or compensation that an investor demands for taking on…

Q: ompute NPV using excel. Discount rate - 10%

A: Net present value or NPV is excess of present value of cash inflows over present value of cash…

Q: Consider the following cash flow diagram. What is the value of x if the internal rate of return is…

A: The value of X here will be the annuity payments that will be equal to P at the given internal rate…

Q: The possible rates of return of two assets, A and B, under different economic conditions are given…

A: Different assets have different level of risk and return. Investor analysis the risk involved in…

Q: The net present value is ... O A. The return which is required for an investment OB. The current…

A: Capital budgeting The process that takes decisions related to investing for the long term is known…

Q: Consider an investment project that has an internal rate of return of 9%, requires an initial…

A: Initial investment = 55,000IRR = 9%At IRR the NPV of the company is zero.So, when discounted using…

Q: Calculate the capitalized worth (CW) of an investment for a given interest rate when the planning…

A: The CW is equal to the current value of a series of payments made each period for an indefinite…

Q: ear Flow 0 -5000 1 2000 2 4000 3 -1500 4 3000 5 4000 6 -6000 7 9000

A: External rate of return is the modified form of internal rate of return in which it is assumed that…

Q: The cash flows for two alternatives X and Y are shown in the table displayed here.     Year: 0 1 2 3…

A: Year  Cash Flow - A   Cash Flow - B  0 -3000 -5000 1 900 1400 2 900 1400 3 900 1400 4 900…

Q: You are evaluating five different investments, all of which involve an upfront outlay of cash. Each…

A: IRR  of a project is the discount rate which makes net present value of the project equal to…

Q: The following investments and probabilities are presented:…

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Q: In using the two-step approach to Enterprise Valuation (EV), where EV = the Present Value of…

A: Terminal value is the value of stable growth period at the end of planning period or high growth…

Q: Financial assets management decision-making often involves determination of the Present Value (PV)…

A: The concept of the time value of money states that the current worth of money is more than its value…

Q: Calculate the duration for the following cash flows of an investment. Given the market interest…

A: Year Cash flow 0 0 1 140 2 150 3 160 4 170 5 180 6 190 7 200 8 250 Interest…

Q: If you wanted to find the present value of the CF described in either of the first two problems in…

A: Present Value: The present value (PV) of a future amount of money or stream of cash flows is the…

Q: The five alternatives shown below are being evaluated by the rate of return method. Incremental ROR…

A: Since the projects are considered to be mutually exclusive the alternative project which is higher…

Q: ​(Present value of annuities and complex cash flows​) You are given three investment alternatives to…

A: As per Bartleby Honor Code, the expert is required only to solve the parts of question, which are…

Q: Consider an investment where the cash flows are: – $946.21 at time t = 0 (negative since this is…

A: Internal rate of return:Internal Rate of Return (IRR) is a financial metric that calculates the…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.