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Nadusha1986 [10]
2 years ago
8

The return on investment earned by atkins construction company for four successive years was 30% 20% -40% and 200%. What is the

geometric mean rate of return on investment?
Business
1 answer:
Whitepunk [10]2 years ago
3 0

The geometric mean rate of return on investment is 29.45%

What is arithmetic mean rate of return?

Arithmetic rate of return is the sum of all returns divided by the number of periods for which the returns were indicated.

Arithmetic rate of return=sum of returns/number of returns

number of returns in this case is 4 since the returns were for 4 years

arithmetic rate of return=(30%+20%-40%+200%)/4

arithmetic rate of return=52.50%

What is geometric mean rate of return ?

It is the return computed using a different approach as shown by the formula below:

geometric mean rate of return= ((1 + R1) × (1 + R2) × ... × (1 +Rn))(1/n) - 1

R1=year 1 return=30%

R2=year 2 return=20%

R3=year 3 return=-40%

R4=year 4 return=200%

n=4(the returns for 4 years)

geometric mean rate of return=((1+30%)*(1+20%)*(1-40%)*(1+200%))^(1/4)-1

Remember the return in year 3 is negative 40%, using a positive return would lead a wrong conclusion

geometric mean rate of return=1.2945-1

geometric mean rate of return=29.45%

The geometric mean rate of return on investment is 29.45%

Read more about geometric average return on brainly.com/question/19559240

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Mays Corp. reported free cash flows for 2018 of $491 million and investment in operating capital of $321 million. Mays Corp. inc
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Answer: $975 million

Explanation:

Given the above details, we can solve for Earnings Before Tax and Interest with the following formula,

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Making EBIT the subject would turn it to be,

EBIT = Operating Cash Flow + Taxes on EBIT - Depreciation

We have all of the above except the EBIT and Operating Cash Flow.

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Operating cash flow = Free Cash Flow + Investment in operating capital

Therefore,

= $491 million + $321 million

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Operating cash flow is $812 million

Plugging it into the original formula we have,

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EBIT = $975 million

Earnings before Taxes and Interest is $975 million.

If you need any clarification do react or comment.

5 0
2 years ago
There are four seats on the board of directors of MMT, Inc., up for election. The firm has 175,000 shares of stock outstanding a
Archy [21]

Answer:

We must spend $575,023 to acquire sufficient shares to guarantee your election to the board

Explanation:

To calculate the number of shares, the below formula will be used

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Number of shares = (175,000 * 1) / (4 + 1) + 1

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We control 35,001 if we wants to guarantee election to the board.

The additional no of shares that we need to buy is as calculated below as we already owns 10,000 shares

Cost = (Number of shares required - Number of shares already owned) * Price per share

Cost = (35,001 shares - 10,000 shares) * $23

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3 years ago
In determining whether to issue a loan, banks are not allowed to ask about an applicant's
Firlakuza [10]

Answer:

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The bank will ask about employment history, credit history, tax information, personal information, the purpose of the loan,  collateral, and other questions related to the ability to repay. A person's country of origin is unnecessary and may elicit elements of discrimination.

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