Eight Dimensions of OCC management assignment help
February 21, 2021
Coronary Artery Disease – Human Body Function
February 21, 2021

Corporate financial policy ( Finance)

I have these two slides presentation about accounting rate of return(ARR) and internal rate of investment( IRR), so i need explanation for each points in the slide using the source down below.

(Accounting Rate of return) slide 1

●The Accounting Rate of Return (ARR) Method uses accounting income.

●The average annual income is divided by the initial or average investment to find ARR.

●ARR is one of the least popular capital budgeting methods with management, as per research.

Key Advantages and Disadvantages:

○Based on accounting profit.

○Simple and easy to calculate.

○Ignores the time value of money.

○Ignores cash flow from investment.

●The acceptance of this method is gradually reducing.

slide 2( IRR)

●Internal Rate of Return compares and evaluates different investments based on their cash flows.

●A discount rate is applied that results in the present value of future net cash flows equal to zero.

●IRR is the most used capital budgeting method, as per research.

Key Advantages and Disadvantages

○It utilizes the time value of money.

○Shows return on original investment.

○Can give conflicting answers for mutually exclusive projects.

○Gives multiple rates when a negative cash flow is involved.

●Highly levered firms, public firms, firms that pay dividends are more likely to use IRR than other firms.

(Graham & Harvey)

( De Jong & Koedijk)

( Bancel & Mittoo)




Sent from my iPhone


Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount!
Use Discount Code “Newclient” for a 15% Discount!

NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.

The post Corporate financial policy ( Finance) appeared first on Top Premier Essays.


"Is this question part of your assignment? We Can Help!"

Essay Writing Service