收益率计算(英文)VIP免费

Chapter7RateofReturnAnalysisRateofReturnMethodsforFindingRORInternalRateofReturn(IRR)CriterionIncrementalAnalysisMutuallyExclusiveAlternativesRateofReturnDefinitionArelativepercentagemethodwhichmeasurestheannualrateofreturnasapercentageofinvestmentoverthelifeofaproject.In1970,whenWal-MartStores,Inc.wentpublic,aninvestmentof100sharescost$1,650.Thatinvestmentwouldhavebeenworth$12,283,904onJanuary31,2002.Whatistherateofreturnonthatinvestment?Example:MeaningofRateofReturnSolution:032$12,283,904$1,650Given:P=$1,650F=$12,283,904N=32Findi:$12,283,904=$1,650(1+i)32i=32.13%NiPF)1(RateofReturnSupposethatyouinvestedthatamount($1,650)inasavingsaccountat6%peryear.Then,youcouldhaveonly$10,648onJanuary,2002.Whatisthemeaningofthis6%interesthere?Thisisyouropportunitycostifputtingmoneyinsavingsaccountwasthebestyoucandoatthattime!So,in1970,aslongasyouearnmorethan6%interestinanotherinvestment,youwilltakethatinvestment.Therefore,that6%isviewedasaminimumattractiverateofreturn(orrequiredrateofreturn).So,youcanapplythefollowingdecisionrule,toseeiftheproposedinvestmentisagoodone.ROR(32.13%)>MARR(6%)ReturnonInvestmentDefinition1:Rateofreturn(ROR)isdefinedastheinterestrateearnedontheunpaidbalanceofaninstallmentloan.Example:Abanklends$10,000andreceivesannualpaymentof$4,021over3years.Thebankissaidtoearnareturnof10%onitsloanof$10,000.LoanBalanceCalculation:A=$10,000(A/P,10%,3)=$4,021UnpaidReturnonUnpaidbalanceunpaidbalanceatbeg.balancePaymentattheendYearofyear(10%)receivedofyear0123-$10,000-$10,000-$6,979-$3,656-$1,000-$698-$366+$4,021+$4,021+$4,021-$10,000-$6,979-$3,6560Areturnof10%ontheamountstilloutstandingatthebeginningofeachyearRateofReturn:Definition2:Rateofreturn(ROR)isthebreak-eveninterestrate,i*,whichequatesthepresentworthofaproject’scashoutflowstothepresentworthofitscashinflows.MathematicalRelation:PWiPWiPWi()()()***cashinflowscashoutflows0ReturnonInvestedCapitalDefinition3:Returnoninvestedcapitalisdefinedastheinterestrateearnedontheunrecoveredprojectbalanceofaninvestmentproject.Itiscommonlyknownasinternalrateofreturn(IRR).Example:Acompanyinvests$10,000inacomputerandresultsinequivalentannuallaborsavingsof$4,021over3years.Thecompanyissaidtoearnareturnof10%onitsinvestmentof$10,000.ProjectBalanceCalculation:0123BeginningprojectbalanceReturnoninvestedcapitalPaymentreceivedEndingprojectbalance-$10,000-$6,979-$3,656-$1,000-$697-$365-$10,000+$4,021+$4,021+$4,021-$10,000-$6,979-$3,6560Thefirmearnsa10%rateofreturnonfundsthatremaininternallyinvestedintheproject.Sincethereturnisinternaltotheproject,wecallitinternalrateofreturn.MethodsforFindingRateofReturnTypesofInvestment(cashflow)ClassificationSimpleInvestmentNon-simpleInvestmentOnceweidentifiedthetypeofinvestmentcashflow,thereareseveralwaysavailabletodetermineitsrateofreturn.ComputationalMethodsDirectSolutionMethodTrial-and-ErrorMethodComputerSolutionMethod13InvestmentClassificationSimpleInvestmentDefinition:Initialcashflowsarenegative,andonlyonesignchangeoccursinthenetcashflowsseries.Example:-$100,250,$300(-,+,+)ROR:AuniqueRORIftheinitialflowsarepositiveandonesignchangeoccursreferredtosimple-borrowing.Non-simpleInvestmentDefinition:Initialcashflowsarenegative,butmorethanonesignchangesintheremainingcashflowseries.Example:-$100,300,-$120(-,+,-)ROR:ApossibilityofmultipleRORsPeriod(N)ProjectAProjectB...