The internal rate of return's shortcomings derive from the assumption that all future reinvestments will take place at the same rate as the initial rate.
<h3>What is
investments?</h3>
The dedication of an asset to achieve a gain in value through time is referred to as investment. Investment necessitates the sacrifice of a current item, such as time, money, or effort. The goal of investing in finance is to earn a return on the invested asset.
Income investing is an investment approach that focuses on constructing an investment portfolio that is expressly designed to provide recurring income. The income investing strategy's main goal is to generate a consistent stream of income.
The type of investor you are and how you should make investments are determined by your investing personality. Your investing personality is essentially your financial risk profile, which considers aspects such as age, financial history, circumstances, and investment aspirations.
To know more about investments follow the link:
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Answer: 35.49
Explanation:
The projected sales will be:
= $76,000 × $36
= $2,736,000
The desired return on the investment will be calculated as the Investment multiplied by the desired return rate. This will be:
= $240,000 × 16%
= $240,000 × 0.16
=$38,400
The total target cost will now be:
= $2,736,000 - $38,400
= $2,697,600
The The target cost per crepe maker is closest to:
= $2,697,600/$76,000
= 35.49
The choices can be found elsewhere and as follows:
A)the top managers
B)divisional managers
C)the sales department
D)the marketing department
<span>E)product manager
I believe the correct answer is option C. </span><span>Price setting is usually determined by the sales department in large companies.</span>
Answer:
14.5%
Explanation:
The computation of the expected return on stock A is shown below:
Given that
The expected return of stock b = 12%
beta = 1.2
Now
risk free rate = 2% market risk premium
So as per CAPM, the expected return = risk free rate + beta × market risk premium
0.12 = 0.02 + 1.2 × market risk premium
1.2 × market risk premium = 0.10
So,
market risk premium is
= 0.10 ÷ 1.2
= 0.0833 or 8.33%
Since they have equal risk reward so the market risk premium would be same for stock A
Now
The expected return of stock A is
= 2% + (1.5 × 8.33)
= 14.5%