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- Which of the following correctly orders the investment rules of average accounting return (AR), internal rate of return (IRR), and net present value (NPV) from the most desirable to the least desirable? a. IRR, AR, NPV. b. AR, IRR, NPV. c. NPV, AR, IRR. d. AR, NPV, IRR. e. NPV, IRR, AR.Which of the following methods does not consider the investment’s profitability? a. ARR b. Payback c. NPV d. IRRWhich of the following investment appraisal techniques does not involve discounting? a. NPV b. Discounted payback period c. ARR d. IRR
- In the blanks provided to the right below, select the letters of the underlying assumption, measurement method, qualitative criteria, or constraint most closely associated with the statements. Some letters may be used more than once and some may not be used at all.A. Separate-entity assumption G. MatchingB. Continuity assumption H. Historical costC. Relevance I. Unit-of-measure assumptionD. Time-period assumption J. Faithful representationE. Cost/benefit K. VerifiabilityF. Revenue recognition L. Full disclosure 1. Any accounting method is acceptable for small items that will not change users’ decisions. 2. Assumes that all financial statement elements can be meaningfully described in dollar terms. 3. Long-term assets that increase in value are not normally written up in the…Explain what is meant by Accounting Rate of Return (ARR) and Net Present Value (NPV) in the context of investment appraisal. Discuss at least TWO advantages and TWO disadvantages of each method.iv. Compute each investment’s Internal Rate of Return (IRR). v. Which investment should Mr. Dates accept and why? vi. Based on the above calculations and analysis, what has caused the ranking conflict?
- a. Sharpe ratio b. Treynor ratio c. Information ratio d. Jensen’s alpha Discuss how to selecet the appropriate measures are for different clients needs (in which cases we selecet each of the above measurments)A realized return is the rate of return actually earned on an investment. Group of answer choices True FalseEnsure to show Excel formulas for work i. Using an example, briefly explain to Mr. Dates what is meant by mutually exclusiveinvestments.ii. Compute each investment’s payback period.iii. Compute each investment’s Net Present Value (NPV).
- 1. True or false. to apply the rate of return analysis correctly, we need to classify an investment i as either simple or non-simpleAccording to Wald's criterion, which investment is decided by looking at the profitability of three investments such as S1, S2 and S3 in the following economic environments? Ekonomik Durumlar S1 S2 S3Canlı Ekonomik Durum 13 6 7Normal Ekonomik Durum 10 9 8Durgun Ekonomik Durum 7 14 4Resesyon Durumu 8 7 15 Economic Conditions S1 S2 S3 Vivid Economic Situation 13 6 7 Normal Economic Condition 10 9 8 Stagnant Economic Condition 7 14 4 Recession Condition 8 7 15Write definition of following with supporting example being an investor: i) Anchoring effect ii) Attribute substitution iii) Sunk-cost effect iv) Dunning Kru´ ger effect v) Commission bias
