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1 year ago

The simple rate of return focuses on accounting net operating income rather than on cash flows. Group starts

1 answer:

jeka941 year ago

3 0

Simple returns focus on accounting for net operating income, not cash flow. The simple method of revenue focuses on cash flow rather than accounting for net operating income.

A simple rate of return is calculated by subtracting the initial value of the investment from the current value and dividing it by the initial value. To output as%, multiply the result by 100.

Under the simple rate of return method, a dollar you receive 10 years later is considered to be worth the $ 1 you receive today. Therefore, the simple yield method can be misleading if the alternative cash flow patterns under consideration are different.

Learn more about cash flows at

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The Simple Rate Of Return Focuses On Accounting Net Operating Income Rather Than On Cash Flows.

A) TRUE

B) FALSE

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The perpetuities can becalculate as follow

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the reasoning behind this formula:

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