Internal Rate of Return In investment decision analysis you may need to calculate internal rate of return. “Internal rate of return (IRR) is the discount rate that gives the project a zero NPV” (McLaney‚ 2006). It is a good choice to use for investment projects. There is a formula for the internal rate of return: (A is the lower discount rate and B is the higher rate‚ a is the NPV at the lower rate and b is the NPV at the higher rate.) For example the Net Present Value (NPV) is 88 when the
Premium Net present value Investment Time value of money
(Interest rate parity is a no-arbitrage condition representing an equilibrium state under which investors will be indifferent to interest rates available on bank deposits in two countries.[1] The fact that this condition does not always hold allows for potential opportunities to earn riskless profits from covered interest arbitrage. Two assumptions central to interest rate parity are capital mobility and perfect substitutability of domestic and foreign assets. Given foreign exchange market equilibrium
Premium Foreign exchange market Exchange rate United States dollar
Some Causes of Fertility Rates Movements Claire Norville Rocio Gomez Robert L. Brown ABSTRACT Fertility patterns are different between countries and over time. Many different factors can affect the fertility rate. This paper will discuss the different factors that have an effect on the fertility rate. Some are economic while some are social. The economic factors will be based in the theories of Richard Easterlin‚ Diane Macunovich‚ Butz & Ward‚ and John Ermisch. The social factors that
Premium Demography Total fertility rate Fertility
INTERNAL RATE OF RETURN Many companies wants to have a return on their investment in a few years and begin to evaluate their projects optimistically calculating an internal rate of real return not yielding results in the end. This does not end up being expected by the companies; According to the article the authors John C. Kelleher and Justin J. MacCormack . They suggest that there is a tendency to a risky behavior‚ Companies started to run the risk of creating unrealistic numbers for themselves
Premium Net present value Investment Internal rate of return
Compounding Factor (6%‚8) = 3‚000‚000 C * 9.90= 3‚000‚000 C = $303‚107.83 2. You have just taken out a mortgage for $575‚000‚ at a fixed rate of 4.75% per year‚ compounded monthly‚ and a term of 30 years. a) Calculate the monthly payments The payments must discount to a value that is equivalent to $575‚000 today‚ assuming a monthly rate of (4.75%/12)‚ or 0.39583% per month‚ for 360 months. C * Annuity discount factor (0.39583%‚360) = 575‚000 C * 191.70 = 575‚000 C = $2
Premium Compound interest Cash flow Internal rate of return
Accounting rate of return Accounting rate of return (also known as simple rate of return) is the ratio of estimated accounting profit of a project to the average investment made in the project. ARR is used in investment appraisal. Formula Accounting Rate of Return is calculated using the following formula: ARR = Average Accounting Profit Average Investment Average accounting profit is the arithmetic mean of accounting income expected to be earned during each year of the project’s life time
Premium Net present value Depreciation Rate of return
term structure of interest rate we need to elaborate how interest rates function and how they are determined. Interest rates are a vital tool to all the macro-economic policy objectives of a government such as control of inflation‚ investment as well as employment. Interest rates refer to the price paid by deficit agents for borrowing funds from the surplus agents. A line that plots interest rate at a set point in time is the term structure or yield curve. Interest rates which may be short term or
Premium Monetary policy Inflation Central bank
Title: Kinetics: The Rate of a Chemical Reaction Objectives: 1. To study the kinetics of chemical reaction‚ 2 I- + S2 O82- I2 + 2 SO42- . 2. To study the effects of reactant concentration (persulphate‚ S2O82-‚ and iodide‚ I-) and temperature on the rate of chemical reactions. ( i) Study the effect of 0.20M (S2O82-) on the rate of chemical reaction. ( ii) Study the effect of 0.10M (S2O82-) on the rate of chemical reaction. ( iii) Study the effect
Premium Chemical reaction Reaction rate Rate equation
the difference in heart rates before and during intense exercise. Aim: The aim of the investigation was to discover how the heart rate varied with the intensity of exercise. The heart rate is a term describing the regularity of the cardiac cycle. The heart rate is the amount of times it contracts (beats) in a unit of time‚ nearly always per minute. At rest the adult female’s heart rate regulates 75 bpm (beats per minute) but this varies between people. If the heart rate is measured before‚ during
Premium Heart rate Heart Blood
Project report On Rate of Exchange and Foreign Investment The Indian case from 2009-10 to 2011-12 Acknowledgement As a part of PGDM curriculum at Birla Institute of Management Technology‚ the preparation of this project report has been a unique and rewarding experience. Apart from our efforts‚ the success of any project depends largely on the encouragement and guidelines of many others. We take this opportunity to express our gratitude to the people
Premium Currency Exchange rate Macroeconomics