the cash flows from an investment. This time adjusted rate of return is also known as the internal rate of return.
The relationship between risk and return in investment analysis is such that, in almost all situations, the anticipated or demanded return rises as the investment risk rises. Conversely, a low or no-risk investment is accompanied by a low anticipated or demanded return on that particular investment.
The rate of return on an investment reflects the relationship between the net earnings accruing from an investment and the amount invested in a project. In this context, rate of return represents the difference in value of an investment at the end of a period and at the beginning of a period divided by the value of the investment at the beginning of a period. Rates of return are typically stated on an annualized basis.
Invested capital refers to all funds placed into an investment, whether such funds are owned or are borrowed. The value of an investment at the end of a period represents the market value of the i
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