Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
How do we use the computed figure when evaluating an investment alternative?
Expert Solution
Step 1
There are various computations available for evaluation of investment alternatives.
The rate of return on investment is an important criteria to evaluate the investment alternatives. The computations include the following measures:
- Net Present value
- Internal Rate of Return
- Profitability index
- Payback Period
- Discounted Payback period
- Accounting rte of return
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