PPT-Chapter 7 Rate of Return Analysis

1 Chapter Contents Internal Rate of Return Rate of Return Calculations Plot of NPW versus interest rate i Fees or Discounts Examples Incremental Analysis Using Spreadsheet 2 Engineering Economics. CHAPTER . 15. Learning Objectives. After studying this chapter, you should be able to:. Explain the nature and importance of capital investment analysis. Evaluate capital investment proposals using the average rate of return and cash payback methods. Planning for Capital Investments. © 2015 McGraw-Hill Education.. Capital Investment Decisions. Purchases of long-term operational assets are . capital investments. . Once a company purchases operational assets, it is committed to these investments for an extended period of time. Understanding the time value of money concept will help you make rational capital investment decisions.. ch14. Company Analysis vs. Stock Valuation. Good companies are not necessarily good . investments. Why?. Compare the intrinsic value of a stock to its market . value. Stock of a great company may be . Thinking . Between the Lines. Crauder. , . Noell. , Evans, Johnson. Chapter 2:. Analysis of Growth. © 2013 W. H. Freeman and Company . 1. Chapter . 2. : Analysis of Growth. Lesson . Plan . 2. Measurements of growth: How fast is it changing?. Thinking . Between the Lines. Crauder. , . Noell. , Evans, Johnson. Chapter 2:. Analysis of Growth. © 2013 W. H. Freeman and Company . 1. Chapter . 2. : Analysis of Growth. Lesson . Plan . 2. Measurements of growth: How fast is it changing?. , Gonzalez, Moore. , Siegert, . Tansey, . & Wyatt. 1. Overview. Expected . and Realized Rate of . Return. Stand-Alone Risk and Return . Portfolio . Risk and . Return. The . Calculation of . Beta. , Gonzalez, Moore. , Siegert, . Tansey, . & Wyatt. 1. Overview. Expected . and Realized Rate of . Return. Stand-Alone Risk and Return . Portfolio . Risk and . Return. The . Calculation of . Beta. Session 6 – July 22, 2014 Final Review 1 Introduction to CPCU 540 Financial Calculations and using the Financial Calculator Order of Operations PPMDAS ( P retty P lease M y D ear A unt S ally) 23. Chapter 7. Contemporary Engineering Economics. Copyright © . 2016. Chapter Opening Story - Investing in Wal-Mart Stock. In October 1,1970, when Wal-Mart Stores, Inc. went public, an investment of 100 shares cost $1,650. . Peter L. Nuthall. Chapter 7. Investment Analysis: Recognizing Input–Output Timing. Understand . the concepts of time and liquidity preference, and their implications for the analysis of investments.. Module 2.3. 5.4 The Internal Rate of Return. IRR: the discount rate that sets NPV to . zero. IRR the rate that yields a break-even NPV . Minimum Acceptance Criteria: . Accept if the IRR exceeds the required return. Learning Objectives. Explain capital budgeting and differentiate between short-term and long-term budgeting decisions. .. Explain the payback model and its two significant weaknesses and how the discounted payback period model addresses one of the problems.. The Project will bring in a 15 % rate of return on the investment. The project will result in a net surplus of $ 10,000 in terms of PW. Rate of Return (ROR) Analysis. Rate of Return. Methods for Finding ROR. Professor Droussiotis. Chapter 1. What’s This?. Expected Value Line Growth (Return). EXIT. ENTRY. Initial. Investment. Risk-Free Rate. Expected Value Line Growth (Return). EXIT. ENTRY. Initial. Investment.