Create an account
accounting rate of return
a measure of profitability computed by dividing the average annual operating income from an asset by the average amount invested in the asset
the process of making capital investment decisions. Companies make capital investments when they acquire capital assets used for a long period of time
internal rate of return
the rate of return that a company can expect to earn by investing in a capital asset. The interest rate that makes the npv of the investment equal to zero
net present value
the difference between the present value of the investments net cash inflows and the investments cost
comparing a capital investments actual net cash inflows to its projected net cash inflows
present value index
an index that computes the number of dollars returned for every dollar invested, with all calculations performed in present value dollars. Computed as present value of net cash inflows divided by investment
Please allow access to your computer’s microphone to use Voice Recording.
Having trouble? Click here for help.
We can’t access your microphone!
Click the icon above to update your browser permissions and try again
Reload the page to try again!Reload
Press Cmd-0 to reset your zoom
Press Ctrl-0 to reset your zoom
Please upgrade Flash or install Chrome
to use Voice Recording.
For more help, see our troubleshooting page.
Your microphone is muted
For help fixing this issue, see this FAQ.
Star this term
You can study starred terms together