Simple Rate of Return
Q: Define constant yield method
A: It is the method of ascertaining the collected discount of securities that trade the secondary…
Q: Find expected return for G.
A: Expected Return is the amount of loss or profit an investor expects to receive on an investment.
Q: Required: a. Determine the discounted rate of return.
A: Formula: Discount rate= Lower Rate +Lower NPV×Higher Rate-Lower RateLower NPV-Higher NPV
Q: Define the term internal rate of return?
A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…
Q: Compute the percentage total return. C
A: The method of finding the intrinsic value of the stock of a company is called stock valuation.…
Q: Why is partitioning an internal rate of return important?
A: Introduction: There are two cash flow components which can form the portioning of internal rate of…
Q: Define return rate
A: The return rate can be calculated on various assets and can be used to compare various investments.…
Q: Explain payback period
A: Answer: Payback period is nothing but the time a company gets back the money that is originally…
Q: O e. Incremental cost.
A: Opportunity cost - Opportunity cost is benefit forgone for the next best alternative for an…
Q: Explain an example of payback how to calculate.
A: A payback period is the amount of time needed to earn back the cost of an investment. The length of…
Q: Expected rate of return.
A: Risk-free rate: This can be described as the rate of return of the asset which has zero risks.…
Q: With the given information, find the Net Present Value (NPV).
A: The net worth of the project after the deduction of the current worth of the cash outflows from the…
Q: Required: i. Using present-value method, determine the best alternative ii. Using the internal rate…
A: By using present value method , debt alternative carrying interest of 10% is the best alternative…
Q: Explain price improvement
A: It is a process where the purchasing customer gets the opportunity to buy shares at a lower cost…
Q: What is the Internal-Rate-of-Return Criterion?
A: Internal rate of return (IRR): The internal rate of return (IRR) is a measure utilized in capital…
Q: what is meant by the required rate of return
A: The return which is expected to be earned by investing in a security is known as Required Rate of…
Q: Define average return
A: The formula to compute average return as follows:
Q: Which different terms are used to refer to rate of return?
A: Rate of return is the return that is expected by the investors from the investment made. It is…
Q: PROVIDE - PRESENT VALUE, FUTURE VALUE, AND internal rate of return (IRR)
A: Present and Future Value: The current value of a cash flow that is expected to occur at some time in…
Q: Internal rate of return
A: Internal rate of return- It is the rate of discount at which the sum of discounted cash inflows…
Q: Define payback period.
A: Capital investment analysis: Capital investment analysis is the process of decision making, planning…
Q: Define efficiency ratios
A: Efficiency Ratios : These ratios are employed to evaluate the efficiency with which the firm manages…
Q: The modified internal rate of return (MMIR) is the discount rate that forces the _____.
A: Explanation: Modified internal rate of return can be better understood from the below formula, where…
Q: e Internal rate of return
A: The following problem can be solved using XIRR function in excel.
Q: Explain quick ratio
A: The formula to compute quick ratio as follows:
Q: Expected return
A: Expected Return is the amount of loss or profit an investor expects to receive on an investment. It…
Q: what is payback period
A: Capital Budgeting: It is the planning process used to determine whether an organization invests in a…
Q: calculate internal rate of return acounting rate of return pay back period
A: Data given: Cost of machine = RM 3,500,000 Useful life of machine = 5 years Residual value = RM…
Q: Explain present value, PV
A: PV is an abbreviation for Present Value. It helps us to ascertain the worth of money today which…
Q: Explain different terms are used to refer to rate of return?
A: Answer: Rate of return is nothing but the returns that are expecting on investments made by…
Q: calculate the internal rate of return
A: Information Provided: Discount rate = 10% Realisable Value = 20%
Q: Explain real rate of return
A: This is the raw rate of return adjusted with inflation. It is used to ascertain the effective return…
Q: What is internal rate of return (IRR) method?
A: NPV shows the excess of PV of all the cash inflows over the initial outlay of the project. It is a…
Q: Explain expected rate of return
A: Return: Return is defined as the money attained or lost on an investment through certain time…
Q: Define yield.
A: Yield can be considered as a metric for cash flow for the investor on the amount with which a…
Q: Explain normal rate of return.
A: Rate of return: Rate of return is the return on investment. it might be a loss or profit on an…
Q: Explain realized rate of return
A: The return generated by an investment is any asset class is the normalized rate of return. When the…
Q: Define realized rate of return
A: Return can be defined as the profit or interest earned by the investor on the investment, which…
Q: Briefly explain the problems associated with the payback method.
A: Capital budgeting is referred as the process of decision making which is used by companies to…
Q: Define a nonlinear cost function.
A: Cost Function: Cost function represents the basic change that comes in the total cost due to the…
Q: One of the advantages of Internal Rate of Return is:
A: The correct answer is b. It gives the closet rate of return.
Q: Explain an example how to calculate internal rate of return.
A: IRR is the return actually earned by the investor and discount rate is the return which the investor…
Q: Another term for return is ..................
A: Return means money which is earned or lost in the process of investment. Return can be in the form…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Required information Exercise 12-8 (Algo) Payback Period and Simple Rate of Return [LO12-1, LO12-6] [The following information applies to the questions displayed below.] Nick’s Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $392,000, have a fifteen-year useful life, and have a total salvage value of $39,200. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 300,000 Less operating expenses: Commissions to amusement houses $ 90,000 Insurance 72,000 Depreciation 23,520 Maintenance 40,000 225,520 Net operating income $ 74,480 Exercise 12-8 Part 1 (Algo) Required: 1a. Compute the payback period associated with the new electronic games. Payback period (answer in years) 1b. Assume that Nick’s Novelties, Incorporated, will not purchase new games unless they provide a payback period of…! Required information Exercise 14-8 (Algo) Payback Period and Simple Rate of Return [LO14-1, LO14-6] [The following information applies to the questions displayed below.] Nick's Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $332,000, have a fifteen-year useful life, and have a total salvage value of $33,200. The company estimates that annual revenues and expenses associated with the games would be as follows: $ 280,000 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance Net operating income Exercise 14-8 Part 1 (Algo) $ 80,000 57,000 19,920 60,000 216,920 $ 63,080 Required: 1a. Compute the payback period associated with the new electronic games. 1b. Assume that Nick's Novelties, Incorporated, will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games?Required information Exercise 14-8 (Algo) Payback Period and Simple Rate of Return [LO14-1, LO14-6] Skip to question [The following information applies to the questions displayed below.] Nick’s Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $320,000, have a fifteen-year useful life, and have a total salvage value of $32,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 230,000 Less operating expenses: Commissions to amusement houses $ 80,000 Insurance 20,000 Depreciation 19,200 Maintenance 50,000 169,200 Net operating income $ 60,800 Exercise 14-8 Part 2 (Algo) 2a. Compute the simple rate of return promised by the games. 2b. If the company requires a simple rate of return of at least 14%, will the games be purchased?
- Required information [The following information applies to the questions displayed below.] Nick’s Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $300,000, have an eight-year useful life, and have a total salvage value of $20,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 200,000 Less operating expenses: Commissions to amusement houses $ 100,000 Insurance 7,000 Depreciation 35,000 Maintenance 18,000 160,000 Net operating income $ 40,000 Garrison 16e Rechecks 2017-05-22 Garrison 16e Rechecks 2018-09-25 2a. Compute the simple rate of return promised by the games. 2b. If the company requires a simple rate of return of at least 12%, will the games be purchased?Required information Exercise 14-8 (Algo) Payback Period and Simple Rate of Return [LO14-1, LO14-6] Skip to question [The following information applies to the questions displayed below.] Nick’s Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $320,000, have a fifteen-year useful life, and have a total salvage value of $32,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 230,000 Less operating expenses: Commissions to amusement houses $ 80,000 Insurance 20,000 Depreciation 19,200 Maintenance 50,000 169,200 Net operating income $ 60,800 Exercise 14-8 Part 1 (Algo) Required: 1a. Compute the payback period associated with the new electronic games. 1b. Assume that Nick’s Novelties, Incorporated, will not purchase new games unless they provide a payback period of five years or less.…Required information [The following information applies to the questions displayed below.] Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $300,000, have a fifteen-year useful life, and have a total salvage value of $30,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $200, 000 Less operating expenses: Commissions to amusement houses $60,000 30,000 18,000 35,000 Insurance Depreciation Maintenance 143, 000 $ 57,000 Net operating income Required: 1a. Compute the payback period associated with the new electronic games. 1b. Assume that Nick's Novelties, Inc., will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games?
- Required information [The following information applies to the questions displayed below.] Nick's Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $680,000, have a fifteen-year useful life, and have a total salvage value of $68,000. The company estimates that annual revenues and expenses associated with the games would be as follows: $ 250,000 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance Net operating income $ 60,000 35,000 40,800 70,000 205,800 $ 44,200 Required: 1a. Compute the payback period associated with the new electronic games.Required information Skip to question [The following information applies to the questions displayed below.] Nick’s Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $672,000, have a fifteen-year useful life, and have a total salvage value of $67,200. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 260,000 Less operating expenses: Commissions to amusement houses $ 90,000 Insurance 36,000 Depreciation 40,320 Maintenance 50,000 216,320 Net operating income $ 43,680 Required: 1a. Compute the payback period associated with the new electronic games. 1b. Assume that Nick’s Novelties, Inc., will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games?Required information Exercise 14-8 (Static) Payback Period and Simple Rate of Return [LO14-1, LO14-6] [The following information applies to the questions displayed below.] Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $300,000, have an eight-year useful life, and have a total salvage value of $20,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $200,000 Less operating expenses: $100,000 7,000 35,000 Commissions to amusement houses Insurance Depreciation 160,000 $ 40,000 Maintenance 18,000 Net operating income Exercise 14-8 Part 1 (Static) Required: la. Compute the payback period associated with the new electronic games. 1b. Assume that Nick's Novelties, Ic., will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games?
- Required information [The following information applies to the questions displayed below.] Nick's Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $425,000, have a fifteen-year useful life, and have a total salvage value of $42,500. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues Less operating expenses: Insurance $ 220,000 Commissions to amusement houses $ 70,000 25,000 25,500 Maintenance 40,000 Net operating income 160,500 $ 59,500 Depreciation Required: 1a. Compute the payback period associated with the new electronic games. 1b. Assume that Nick's Novelties, Incorporated, will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Assume that Nick's Novelties, Incorporated, will…es Required information [The following information applies to the questions displayed below.] Nick's Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $385,000, have a fifteen-year useful life, and have a total salvage value of $38,500. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance Net operating income $ 80,000 53,000 23,100 70,000 $ 280,000 Complete this question by entering your answers in the tabs below. 226, 100 $ 53,900 2a. Compute the simple rate of return promised by the games. 2b. If the company requires a simple rate of return of at least 12%, will the games be purchased?! Required information [The following information applies to the questions displayed below.] Nick's Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $332,000, have a fifteen-year useful life, and have a total salvage value of $33,200. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 280,000 Less operating expenses: Commissions to amusement houses $ 80,000 Insurance 57,000 Depreciation 19,920 60,000 Maintenance 216,920 $ 63,080 Net operating income Required: 1a. Compute the payback period associated with the new electronic games. 1b. Assume that Nick's Novelties, Incorporated, will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games?