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
Necessary things for Receivership If no power to appoint a receiver is given by the terms of issue, the trustee for the debenture holders, or a debenture holder acting on behal

2(i). If all depositors tried to convert their deposits into cash at once, they would find that there are not sufficient reserves in the system to permit all of them to do this at

The dictionary explains the word 'inventory' as stock of goods. Although, inventory implies that such type of assets that will be disposed of in future in the common course of busi

National Association of State Boards of Accountancy - serves as a forum for 54 State Boards of Accountancy, that administer the uniform CPA examination, license Certified Public Ac

Legal Aspects There is no law relating to branch accounts but examination problems under this heading are frequently linked to either partnership or company account problems. Ans

inventory ratio of 4 compared to 7.1

On January 1, 2013, NewTune Company exchanges 15,000 shares of its common stock for all of the outstanding shares of On-the-Go, Inc. Each NewTune''s shares has a $4 par value and a

#explain the accounting cyclequestion..

security service= R38570 the annual security services contract has been taken out on 1 March 2012. The fee was increased by 10% from january 2013 and the fee has already been paid

Would you invest in a project that has a net investment of $14,600 and a single net cash flow of $24,900 in 5 years, if your required rate of return was 12 percent?