The difference between an investment's market value and its cost is known as its Blank______. Multiple choice question. net present value internal rate of return profitability index payback period
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The difference between an investment's market value and its cost is known as its Blank______.
profitability index
payback period
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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.The Capital Asset Pricing Model (CAPM) asserts that an asset’s expected return is equal to the risk-free rate plus a risk premium for: a. Volatility b. Systematic risk c. Non-systematic risk d. Diversification e. Marginal utility of consumptionWhat ROI will equate the PV of Inflows and the PV of outflows? a. Internal rate of return (IRR) b. Cost of capital rate c. The desired rate of return d. The minimum rate of return.
- Which one of the following is most closely related to the net present value profile? A: Payback B: Discounted payback C: Profitability index D: Average accounting return E: Internal rate of returnWhy are the net present value and the internal rate of return models superior to the payback period and the accounting rate of return models?Which approach to investment analysis is "best" in terms of accounting for both the timing and amount of revenue streams from a potential investment? A. the payback period B. the simple rate of return C. the net present value D. the internal rate of return
- Which method does not consider the time value of money? Choose the correct. A. Net present value B. Internal Rate of Return C. Average rate of return D. Profitability Indexwhy net present value is considered to be superior to internal rate of return as an investment appraisal method? Critically evaluate and give an example if possibleWhat advantage does the Sharpe Ratio have over the Coeff. Of Var. when used to compare investment performance?
- The present value of an investment's future cash flows divided by its initial cost is the: O Net present value. O Internal rate of return. O Average accounting return. O Profitability index. O Payback period.Discounting an investment’s cash flows using the internal rate of return will result in which of the following? Group of answer choices net present value of one net present value of zero positive net present value negative net present valueWhat is a satisfiable investment? When the present value of benefits surpasses the cost of an investment, what conclusion can be drawn about the investor's rate of return in comparison to the discount rate?