The expected average rate of return in the fixed asset above is 36.92%. The rate of return is the income or loss of a proposed investment in a specified amount of time. In this case, a company wants to buy a 4-year life fixed asset which can increase the company's income by $240,000. We can calculate the rate of return by dividing the net income from the investment with the proposed investment to obtain the portion of return received from the investment<span>. Formula: (Net Income From The Investment/Proposed Investment) x 100%.</span>
Answer: Technology over the past 10 years has changed very much with more people having access to technology know it is easier for many people to communicate around the world which allows for globalization. This helps us trade more because of communication which allows to live in our world today.
Explanation: I got it right after writing this short paragraph so you should too good luck.
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Answer:
5%
Explanation:
In order to compute the abnormal return first we have to find out the actual return which is shown below:
Actual return is
= ($21 - $18 + 1.32) ÷ ($18) × 100
= 24%
And, the expected return is
= Risk free rate of return + Beta × (Market rate of return - risk free rate of return
= 7% + 1.20 × (17% - 7%)
= 7% + 1.20 × 10%
= 7% + 12%
= 19%
So, the stock abnormal return is
= 24% - 19%
= 5%