What is the nominal rate of return on an investment? Multiple choice question. It is the average rate of return earned by similar investments. It is the percentage change in the number of dollars the investor has. It is the percentage change in the buying power of the investor. It is the rate of return earned in excess of the average rate of return earned by similar investments.

What is the nominal rate of return on an investment? Multiple choice question. It is the average rate of return earned by similar investments. It is the percentage change in the number of dollars the investor has. It is the percentage change in the buying power of the investor. It is the rate of return earned in excess of the average rate of return earned by similar investments.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 14MC: This calculation determines profitability or growth potential of an investment, expressed as a...

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Similar questions

Why are rates of return superior to dollar returns when comparingdifferent potential investments?
Which of the following decision criteria is the easiest to use and very popular among investors? O Payback period. O Internal rate of return. O Average accounting return. Net present value. O Discounted return on investment.
2. How would you describe the correlation between risk and return in investments, and what are the various types of income that investors consider from their standpoint?
The profitability index is another method to evaluate capital investments. If you are trying to compare investments of different sizes, why is the profitability index a better way to do this when compared to the net present value method?
The expected value of an investment: Answer a. Is what the owner will receive when the investment is sold b. Is the sum of the payoffs c. Is the probability-weighted sum of the possible outcomes d. Cannot be determined in advance
A realized return is the rate of return actually earned on an investment. Group of answer choices True False
What is a satisfactory investment? When the present value of benefits exceeds the cost of an investment, what can you conclude about the rate of return earned by the investor relative to the discount rate?
What 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?
The expected rate of return of an investment ________. a. equals one of the possible rates of return for that investment b. equals the required rate of return for the investment c. is the mean value of the probability distribution of possible returns d. is the median value of the probability distribution of possible returns e. is the mode value of the probability distribution of possible returns
What is the investor’s expected after-tax internal rate of return on equity invested (ATIRR)?
The fisher effect primarily emphasizes the effects of on an investor's rate of return
This method evaluates the return of an investment by dividing the annual average income by the average investment, Select one: a. Discounted Approach b. Simple rate of return Method c. Cash Payback Method d. Internal Rate of Return Method