Asked by Gabriel Barrowman on Jun 15, 2024
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One of the strengths of the simple rate of return method is that it uses data about cash flows rather than accounting net income.
Simple Rate of Return
A method of evaluating the financial performance of an investment by dividing annual incremental operating income by initial investment.
Cash Flows
The total amount of money being transferred into and out of a business, especially affecting liquidity.
Accounting Net Income
The profit of a company after all expenses and taxes have been deducted from revenues.
- Comprehend the fundamental principles of capital budgeting and the various techniques applied in assessing investment projects.
- Attain insights into the simple rate of return method and its deployment.
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Learning Objectives
- Comprehend the fundamental principles of capital budgeting and the various techniques applied in assessing investment projects.
- Attain insights into the simple rate of return method and its deployment.
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