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Topic: Rate of return

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	Rate of return - Wikipedia, the free encyclopedia
		It has been suggested that Rate of return on investment be merged into this article or section.
		The analysis of the return on investment is either done by static or dynamic formal methods, which may be distinguished by the role of time in the model chosen.
		Annualized returns express the rate of return of a portfolio over a given time period on an annual basis, or a return per year.
	en.wikipedia.org /wiki/Rate_of_return (962 words)

	Social Security's Rate of Return
		However, even the best-case rate of return (5.37 percent for a single-earner couple with children in which the worker was born in 1932) lies below 7 percent, a conservative estimate of what economists estimate to be the long-range real rate of return on equities.
		However, in calculating the return, an amount is removed from taxes paid that is equal to the premium on a term life insurance policy which has the same value as benefits that are paid to children of workers (and the spouse caring for their children) who die before retirement.
		The annualized real rate of return on equities is assumed to be 5.7 percent, which lies at the lower boundary of professional estimates of the long-run returns to equities.
	www.heritage.org /Research/SocialSecurity/CDA98-01.cfm (8573 words)

	Rate of Return (Site not responding. Last check: 2007-09-29)
		The rate of return of a stream of net benefits is defined as the value of d at which the sum of all investments and payouts in the stream under consideration becomes zero.
		The rate of return of a time series of net expenditures and revenues is equal to the rate of interest a bank would have to pay on deposits (and charge for loans) to generate sufficient interest to cover (together with the deposits) the revenues in the amount and timing as given in the series.
		This series of revenue and expenditures also gives a rate of return of 8.36 percent per year, which is as much as the bank account gave in interest in the example of the preceding paragraph.
	www.waterlandfarm.com /rate_of_return1.htm (5151 words)

	Rate of Return
		Rate of return analysis is the last of the three methods that analyze measures of investment worth.
		Rate of return analysis, the analysis technique that will be discussed now, is based on the measure of yield from a project.
		The term internal rate of return (IRR) signifies the internal nature of the rate of return from an investment.
	coen.boisestate.edu /mkhanal/rateof.htm (337 words)

	Rate of return pricing - Wikipedia, the free encyclopedia
		Target rate of return pricing is a pricing method used almost exclusively by market leaders or monopolists.
		You start with a rate of return objective, like 5% of invested capital, or 10% of sales revenue.
		An unusual consequence of this pricing model is that to keep the target rate of return constant, the firm will have to continuously be changing its price as the level of demand changes.
	en.wikipedia.org /wiki/Rate_of_return_pricing (480 words)

	THE PROFITABILITY OF INVESTMENT IN EDUCATION:CONCEPTS AND METHODS
		The social rate of return summarizes the costs and benefits of the educational investment from the state's point of view, i.e., it includes the full resource cost of education, rather than only the portion that is paid by the recipient of education.
		The private rate of return to an investment in a given level of education in such a case can be estimated by finding the rate of discount (r) that equalizes the stream of discounted benefits to the stream of costs at a given point in time.
		The rather high rate of return to investment in primary education is due to the fact that one-third of the workforce is illiterate, hence there is a big payoff at the margin when someone completes primary education.
	www.worldbank.org /html/extdr/hnp/hddflash/workp/wp_00063.html (3993 words)

	Interpretation of the Rate of Return Formula
		This formula shows that the expected rate of return on the British asset depends on two things, the British interest rate and the expected percentage change in the value of the £.
		Note that because of the exchange rate change, the rate of return on the British asset is considerably higher than the 5% interest rate.
		This means that 10% of the rate of return arises solely because of the £ appreciation.
	internationalecon.com /v1.0/Finance/ch10/10c060.html (627 words)

	Economics Interactive Lecture: Internal Rate of Return
		For some investments, like bank accounts, the internal rate of return is easy to figure because the bank tells you what it is. For example, a 5% simple interest bank account has an internal rate of return of 5%.
		The idea that better investments have higher internal rates of return is appropriate for comparing investments that have their costs first and their positive incomes later, and which have about the same initial costs.
		If an investment has a high rate of return that persists over a long period of time, economists infer that competition must not be working as it should to lower income and equalize rates of return.
	hadm.sph.sc.edu /Courses/Econ/irr/irr.html (4134 words)

	Internal Rate of Return Revisited
		Internal rate of return (IRR) is rarely used in government analyses.
		The Project C "IRR" is a rate of payment or outflow, not a rate of return.
		The 697.14 percent rate before it is 58 times a nominal 12 percent interest rate and over 25 times a a very attractive 25 percent return on investment.
	members.tripod.com /~Ray_Martin/DCF/nr7aa003.html (5077 words)

	R Definitions: Campbell R. Harvey's Hypertextual Finance Glossary
		Ratings can also be an evaluation a country's creditworthiness or ability to repay, taking into consideration its estimated percentage default rate and political risk.
		The rate of interest excluding the effect of expected inflation; that is, the rate that is earned in terms of constant-purchasing-power dollars.
		The interest rate on the loan is generally fixed during the term of the note, but when the balloon comes due, the lender may refinance it at a higher rate.
	www.duke.edu /~charvey/Classes/wpg/bfglosr.htm (8529 words)

	Rate of Return
		Rate of return is a measure of how productive an investment is, expressed in percentage terms.
		If you expect inflation to be higher than 3% then the ROR would be larger than calculated and if you expected the inflation rate to be lower than 3% then the ROR would be lower than calculated.
		Rate of return information can be used to compare growing trees as an investment with other investment opportunities.
	ahc.caf.wvu.edu /werc/rate_of_return.htm (332 words)

	Return on Investment and Required Rate of Return
		Typically, returns are calculated on an annual basis and referred to as annual rate of return.
		Returns are the average annual total (income and capital appreciation) arithmetic mean for 1926 to 2000 in the United States.
		The lowest rate of return was U.S. Treasury bills at 3.9 percent annually and the highest was Micro-Cap stock at 18.4 percent annually.
	www.vercoradvisor.com /articles/basic.html (691 words)

	Invest FAQ:Analysis:Internal Rate of Return (IRR)
		If you have an investment that requires and produces a number of cash flows over time, the internal rate of return is defined to be the discount rate that makes the net present value of those cash flows equal to zero.
		This article discusses computing the internal rate of return on periodic payments, which might be regular payments into a portfolio or other savings program, or payments against a loan.
		Technically, IRR is a discount rate: the rate at which the present value of a series of investments is equal to the present value of the returns on those investments.
	invest-faq.com /articles/analy-int-rate-return.html (1212 words)

	President Misleads On Social Security Rate Of Return, 6/6/05
		Prospective returns to young people are low mostly because we gave benefits to older generations of retirees who did not contribute their share of taxes to pay for them.
		In stating that Social Security’s 1.8 percent return is pitiful compared to the 4.5 percent return that would be expected on a mix of stocks and bonds, the President committed another basic error — he ignored the additional risk that is associated with investing in the stock market.
		The risks associated with the stock market are the reason that when the Congressional Budget Office analyzes rates of returns under Social Security proposals that include private accounts, CBO adjusts the rates of return to account for the increased risk that is associated with stock-market investment.
	www.cbpp.org /6-6-05socsec.htm (1068 words)

	CCH Business Owner's Toolkit \| Internal Rate of Return
		The internal rate of return (IRR) method of analyzing a major purchase or project allows you to consider the time value of money.
		If the internal rate of return is less than the cost of borrowing used to fund your project, the project will clearly be a money-loser.
		As an example of how the internal rate of return works, let's say you're looking at a project costing $7,500 that is expected to return $2,000 per year for five years, or $10,000 in total.
	www.toolkit.cch.com /text/P06_6550.asp (751 words)

	ROI Guide: Internal Rate of Return
		February 17, 2003 (Computerworld) Definition: The internal rate of return (IRR) is the discount rate that results in a net present value of zero for a series of future cash flows.
		What it means: It's a cutoff rate of return; avoid an investment or project if its IRR is less than your cost of capital or minimum desired rate of return.
		The investment returns $300,000 (undiscounted) per year in each of the five years after the initial investment, for a net return of $500,000.
	www.computerworld.com /printthis/2003/0,4814,78524,00.html (743 words)

	Keynes's Internal Rate of Return
		Firms were presumed to "rank" various investment projects depending on their "internal rate of return" (or "marginal efficiency of investment") and thereafter, faced with a given rate of interest, chose those projects whose internal rate of return exceeded the rate of interest.
		Keynes defined the internal rate of return as the "marginal efficiency of capital", which Abba Lerner (1944, 1953), more accurately, rebaptized as the "marginal efficiency of investment" (MEI).
		Now, Keynes himself appealed to Irving Fisher's (1930) notion - arguing that "Professor Fisher uses his "rate of return over cost" in the same sense and for precisely the same purpose as I employ the "marginal efficiency of capital"" (Keynes, 1936: p.141).
	cepa.newschool.edu /het/essays/capital/keynesreturn.htm (2109 words)

	High Rate of Return (Site not responding. Last check: 2007-09-29)
		Our present preferred earnings rate is 8% per year to our members, and maintaining this rate is one of our key goals.
		We understand that unexpected drops in rates of return can be particularly harmful to people who count on their earnings for their monthly income.
		We have maintained our 8% rate of return throughout our 22 years of operation by carefully structuring our projects so that our members are protected.
	www.gourleyandgourley.com /HighRate.htm (202 words)

	HP 10b Calculator - Calculating Modified Internal Rate of Return
		The Modified Internal Rate of Return (MIRR) is sometimes offered, particularly in the real estate profession, as a way to recognize imperfect capital markets, in which reinvestment rates and requirements of liquidity limit the more stringent assumptions of IRR and NPV.
		An average rate of return on recent market investments might be used.
		The safe rate is 9 percent and the investor expects to reinvest positive cash flows at 14 percent.
	h10025.www1.hp.com /ewfrf/wc/document?dlc=en&lc=en&cc=us&docname=bpia5028 (355 words)

	Concept of required rate of return : Moneyweb (Site not responding. Last check: 2007-09-29)
		A required rate of return is the return above which an investment makes sense and below which it does not.
		As an investor, the required rate of return, also known as the hurdle rate, is one of the most important factors to consider when selecting shares for your portfolio.
		This means that the rate of return does not remain constant but depends upon expected changes in the three variables that have been discussed.
	www.moneyweb.co.za /education/share_focus/197263.htm (506 words)

	internal rate of return (Site not responding. Last check: 2007-09-29)
		The internal rate of return of an investment is the discount rate which causes the present value of its cash flows to equal its current cost.
		It is "internal" to the investment because it is determined by only cash inflows and outflows of the investment with no information drawn externally from the market or other investments, such as the riskless or risk-adjusted return.
		Unfortunately, for investments with an oscillating sequence of negative and positive cash flows, more than one positive solution to the internal rate of return may exist, with no clear rule for deciding among them.
	www.in-the-money.com /glossarynet/internal.htm (97 words)

	NPV and IRR -- Measures for Evaluating Investments
		It is often assumed that higher is better for both of the net present value and the internal rate of return. In particular, it is usually stated that investments with higher internal rates of return are more profitable than investments with lower internal rates of return.
		However, this is not necessarily so. In some situations, an investment with a lower internal rate of return may be better, even judged on narrow financial grounds, than an investment with a higher internal rate of return.
		The right blue dot is where the curve crosses the discount rate axis, which is where the net present value is $0. The discount rate here, 0.054 (5.4%), is the internal rate of return.
	hspm.sph.sc.edu /COURSES/ECON/invest/invest.html (2627 words)

	Required Rate of Return
		The risk-free rate, in practice is normally assumed to be the return on U.S. Treasury bills.
		Checking out the the historical relationship between stocks and bills we see that large stocks have returned an average of 10.2 percent over the period of 1926-1994, and Treasury bills have return an average of 3.7 percent over the same time.
		Ke, the required rate of return, can be used as a discount rate for future cash flows from an investment.
	www.kathleensindell.com /requiredrateofreturn.htm (484 words)

	Internal rate of return (IRR)
		As the word "Return" indicates, the IRR view of the cash flow stream is essentially an investment view: money will be paid out in order to bring in gains.
		IRR has a simply stated definition: "The IRR for an investment is the discount rate for which the total present value of future cash flows equals the cost of the investment." It is the interest rate, that is that produces a 0 NPV.
		For Case A, an interest rate of 38% produces NPV or DCF = 0, whereas Case B hits 0 with an interest rate of 22%.
	www.solutionmatrix.com /internal-rate-of-return.html (729 words)

	Internal Rate of Return
		The Internal Rate of Return (IRR) is the discount rate that delivers a net present value of zero for a series of future cash flows.
		The major difference is that while Net Present Value is expressed in monetary units (Euro's or Dollars for example), the IRR is the true interest yield expected from an investment expressed as a percentage.
		Internal Rate of Return is the flip side of Net Present Value and is based on the same principles and the same calculations.
	www.12manage.com /methods_irr.html (407 words)

	Rate Of Return
		Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice.
		Any rate of return entered into the interactive calculator to project future values should be a reasonable average return for the period.
		Rates of return will vary over time, and generally the higher the rate of return the higher the degree of risk.
	www.fincalc.com /sav_08.asp?id=12425 (169 words)

	Internal Rate of Return (Site not responding. Last check: 2007-09-29)
		Internal Rate of Return by definition is the rate of return at which the Net Present Value of a stream of payments/incomes is equal to zero.
		The rate at which it does is commonly referred to as the "discount rate".
		The investment with a higher Internal Rate of Return is USUALLY the bettern investment.
	ces.iisc.ernet.in /hpg/envis/ratdoc95.html (641 words)

	Internal Rate of Return as supplied by EagleTraders.com
		The rate of interest at which the present value of expected net cash flows from a project equals its initial cash outlays; a measure of the rate of profit per dollar of investment.
		In evaluating a proposed investment, the internal rate of return is computed to the minimum desired rate of return to determine whether a project should be accepted or rejected.
		If the internal rate of return is equal to or greater than the minimum desired rate of return, the project is desirable.
	www.eagletraders.com /advice/securities/internal_rate_of_return.htm (176 words)

	[No title] (Site not responding. Last check: 2007-09-29)
		Vanguard calculates personal rate of return using a formula that takes into account the performance of your investments, as well as the timing and amount of your cash flows in and out of your investments.
		Your personal rate of return and activity summary data is as of the last day of the previous month.
		11:28 AM It occurred to me that when Vanguard calculated the rate of return and the 2004 and 2005 year-end balance were different from the balances shown on the year-end statements that they may have added accrued interest on bond holdings.
	socialize.morningstar.com /NewSocialize/Asp/FullConv.asp?forumId=F100000015&convSeqNumber=46767&mrr=1137342480 (517 words)

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