Measure of return in percentage terms, Financial Accounting

Both IRR and ROCE tenders a relative measure of return in percentage terms a feature that is seen as attractive to managers who may perhaps have difficulty in interpreting the absolute measure of value offered by net present value. A comparative measure of return ignores the size of the initial investment nevertheless and consequently should not be relied on as a sole measure of investment worth.

Academically IRR is preferred to ROCE for the reason that it takes account of the time value of money uses cash flows as well as compares the return on investment projects with the cost of capital of a company.

Nespa's utilize of numerous investment appraisal methods is however common in practice as few companies rely on a single investment appraisal method. In fact one investigation reported that 67% of companies employed three or more methods.

Posted Date: 7/11/2013 6:18:09 AM | Location : United States

Related Discussions:- Measure of return in percentage terms, Assignment Help, Ask Question on Measure of return in percentage terms, Get Answer, Expert's Help, Measure of return in percentage terms Discussions

Write discussion on Measure of return in percentage terms
Your posts are moderated
Related Questions
International Accounting Standards Committee, the (IASC) - is an independent private sector body, formed in 1973, with objective of harmonizing the accounting principles that are u

I want to do a custom dissertation on IAS 40 investment property which needs to include a brief outline, positive as well as negative international critique with respect to the sta

define law including contract and bankruptcy

under gaap, are proceeds from capital lease obligation reported in the statement of cash flow and why

Trying to calculate earnings per share. Is net income the same as earnings before interest and taxes?

Tally & Co. incurred a pretax operating loss of $100,000 in its first year of operations for both financial reporting and income tax purposes. However, it expects to be profitable

This is partly taken from a court case where one of my colleagues was a witness. Suppose that an employee is terminated without cause and that she sues the company for compensation

Q. Evlaute Expected value of sales volume? (17500 × 0·3) + (20000 × 0·6) + (22500 × 0·1) = 19500 units Expected NPV = (((19500 × 1·35) - 10000) × 3·605) - 50000 = $8852 W

Ely purchased a patent (with a remaining legal life of ten years) from Backo on January 1, 2010 for $300,000. Ely expected to use the patent for five years. The carrying value on B