Which are the two computational schemes for calculating this earned interest yield?

Q: Distinguish the nominal rate of return from the real rate of return.

A:

Q: What is market value ratio?

A: Ratio is the relation between two different quantities obtained after dividing one by another.

Q: Which are the Methods for Finding Rate of Return?

A: A Rate of Return (ROR) is the gain or loss of an investment over a certain period of time. When the…

Q: How can we calculate the Times-Interest-Earned Ratio?

A: Times Interest Earned Ratio:  It is one of the solvency ratios. It is a measure to evaluate the net…

Q: Define the term internal rate of return?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: What is the marginal rate of return? How is it calculated?

A: Answer: Marginal rate of return can be defined as the return obtained or received by means of…

Q: a. what is the difference between the discount rate used for net present value and the internal rate…

A: Discount rate used for net present value is rate which investor want to earn from a project . It is…

Q: Nhat is the exact rate of return?

A: The net gain or net loss of an investment over a predetermined time period is referred to as a rate…

Q: Present using the rate of return method (ROR) with the formula. If the NPV is used to determine the…

A: Here, Net Cash Flow is  31250 Rate of Interest is 10% Initial Investment is 100000 NPV is 18462…

Q: What is the internal rate of return?

A: Internal rate of return is the discount rate at which present value of cash inflows equals outflows…

Q: What is the Times-interest·earned ratio?

A: It is important to analyze whether a company has ability to pay off its debts. Means, it is…

Q: How to calculate Present Value Interest Factors?

A: PVIF is known as Present Value Interest Factor. PVIF refers to a factor that is very useful in…

Q: Identify the MARR (or external interest rate)?

A: A minimum acceptable rate of return (MARR) is the all-out advantage that a speculator wants to pick…

Q: What is the basis for the discount rate in a DCF analysis? Describe how this rate mightbe estimated.

A: Basis of discount rate in DCF analysis is to compute the PVF of future Cash Flows expected as it is…

Q: What is the Relationship between the Incremental Cost and the Loan-to-Value Ratio?

A: The question is based on the concept loan to value ratio and its relationship with incremental cost.

Q: How to Calculate Compound Interest Factors and explain with example?

A: It is interest ascertained based on the starting principal and frequently contains all the collected…

Q: ected rate of return concept differ from that of the rea

A: There are many method of valuation of stock based on expected rate and realized return and dividends…

Q: Which factor determines how much will be saved at different interest rates?

A: The time preference of the consumer for consumption helps in determining the amount that will be…

Q: Please explain the difference between the terms interest rate and required return by defining each.

A: The amount which is charged by the lender to the borrower in order the use assets is known as the…

Q: difference between internal rate of return and net present value?

A: Difference between internal rate of return and net present value?

Q: What discount rate is used in a lessor’s NPV analysis?

A: Weighted average cost of capital is used as discount rate in Lessor's NPV analysis.

Q: Which different terms are used to refer to rate of return?

A: Rate of return is the return that is expected by the investors from the investment made. It is…

Q: What is the net income for both options assuming present worth method?

A: PRESENT WORTH OF BATCH Depreciation = (50,000 - 6000) / 5 = $8800 P{B} = -50,000 - (10,000) (P/A,…

Q: Interest cost is calculated by multiplying the______by the ______?

A: Interest cost is calculated by multiplying the  Principle amount by one plus the annual interest…

Q: What is payout period and how is it calculated?

A: Companies employ various methods in the process of selection of the most financially appropriate…

Q: Compare the mutually exclusive alternatives based on the rate of return?

A: Mutually exclusive projects are the projects out of which one best project is selected due to lack…

Q: When is the Times-Interest-Earned Ratio?

A: The TIE is a calculation of a firm's ability to reach its debt liability based on its current…

Q: What is the single-payment present-worth factor?

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: What is net interest margin(NİM)?

A: There are various profitability ratios

Q: What are the different terms used to refer to the rate of return?

A: Rate of return is an expected profit on an investment by a investor. It is a rate at which investor…

Q: What is the Net Interest Margin (NIM)

A: Net Interest margin (NIM) is percentage of difference between interest income earned on loans and…

Q: Explain different terms are used to refer to rate of return?

A: Answer: Rate of return is nothing but the returns that are expecting on investments made by…

Q: Distinguish between the initial rate of interest and the expected yield on an ARM. What is the…

A: Introduction: The adjustable rate mortgage is one of the method used to calculate the interest rate…

Q: Where does the discount rate from present value came from? How to solve it?

A: In finance, a reduction rate is that the rate of come wont to discount future money flows back to…

Q: Describe the Methods for Finding Rate of Return?

A: Capital budgeting is the process a company follows to decide whether to purchase a fixed asset or…

Q: What is present value interest factor?

A: The present value interest factor is a mathematical equation used to estimate today's value of money…

Q: Describe the method of developing a Present Worth Distribution?

A: Present value or Present Worth of an investment or a project is the value of future cash flow…

Q: Calculate the Payback period, Accounting Rate of Return and the Net Present Value (using a 17%…

A: Given:

Q: Illustrate the market interest rate to find the net present worth?

A: Investors frequently find the present worth of the fund flows for the reason that savers receive the…

Q: What formula do you use to calculate the payback period?

A: Capital budgeting is a process to determine the worth of the project in which the company wants to…

Q: what is the difference between a required rate of return and an expected rate of return?

A: Rate of return (ROR) is a value at which an investor earns additional amount on invested amount…

Q: /hat is the exact rate of return?

A: MACHINE A         PV FACTOR PRESENTVALUE A 0 FIRST COST -8000   8000…

Q: What is meant by investment yields?

A: Investment Yield:  It defined as Earnings or income which is earned on investment over the period of…

Q: How is the PW analysis dependent on the rate of interest used for the PW computation?

A: Net present value (or) PW analysis is one of the capital budgeting techniques. When a company is…

Q: How is the payback period is calculated?

A: Payback period is the amount or length of time taken by an investment to recover its cost.

Q: How is NPW used as a Function of Interest Rate?

A: Present value computes the existing value of future benefits by discounting future worth with a…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.