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.
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The Simple Rate Of Return Focuses On Accounting Net Operating Income Rather Than On Cash Flows.
A) TRUE
B) FALSE
Answer:
A) Increase by 50 million
Explanation:
A is correct.
Below is the current account balance calculation
CA = Sp -I + (T-G- R)
CA stands for Current account balance
Sp stands for Private sector savings
I is Investments, T = Taxes
G represents government spending's, whereas R = Transfers
CA = -25-(-25) + ( 100-50-0 ) = 50, increase by 50 million euro
