Advantages of rate of return analysis 1. Able to compute a single figure of merit that...

 

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Advantages of rate of return analysis 1. Able to compute a single figure of merit that is readily understood 2. No interest rate is introduced into the calculations b) Consider the following cash flow: Year 0 1 2 3 4 45 5 Cash Flow ($) -1000 0 300 300 300 300 Compute the rate of return on the $1000 investment. Advantages of rate of return analysis 1. Able to compute a single figure of merit that is readily understood 2. No interest rate is introduced into the calculations b) Consider the following cash flow: Year 0 1 2 3 4 45 5 Cash Flow ($) -1000 0 300 300 300 300 Compute the rate of return on the $1000 investment.

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