LTA 1/04 • P. 9– 2 4 EVA LILJEBLOM AND MIKA VAIHEKOSKI* Investment Evaluation Methods and Required Rate of Return in Finnish Publicly Listed Companies ABSTRACT Financial literature advocates the use of the Net Present Value method for the evaluation of investments. Its key parameter is the required rate of return on equity‚ which is to be calculated using the Capital Asset Pricing Model or a similar model especially if the company is publicly listed. However‚ there is ample evidence
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1.1 INTRODUCTION Every investment is characterised by return and risk. The concept of risk is intuitively understood by investors. In general‚ it refers to the possibility of incurring a loss in a financial transaction. But risk involves much more than that. The word ‘risk’ has a definite financial meaning. The possibility of variation of the actual return from the expected return is termed risk. Corporate securities and government securities constitute important
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Growth rates and how to calculate them. Growth rates can be tricky to calculate and interpret and many people get confused. So here’s how to get ahead of everyone. Let’s start with a time series where we know the answer. In the example below‚ X starts at 100‚ grows 3%‚ then falls back again‚ then grows 3% again. So over the three years‚ it has grown from 100 to 103. 1 Year 2000 2001 2002 2003 Average CAGR 2 3 4 X Growth X DlnX 100 103 0.03 0.0295588 100 -0.0291262 -0.0295588 103 0.03 0.0295588
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Internal Controls Internal controls are all the procedures and measures companies put in place in order to achieve two specific goals related to accounting (Kieso‚ Kimmel‚ & Weygandt‚ 2011). The first goal is the protection against loss of assets from various sources such as theft or accounting error (Kieso‚ Kimmel‚ & Weygandt‚ 2011). Companies‚ clients and shareholders must have assurance that there is suitable control over all business assets like inventory and bank accounts all the
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FINANCIAL MANAGEMENT CONCEPTS FOR M.B.A II SEMESTER STUDENTS | |ABC System : a System used to categorize inventory items to ensure that the most important ones are reviewed most often. | | |Account Receivable: A balance due from a customer. | | |Aggressive Working Capital Investment Policy : A policy under which holdings of cash‚ securities‚ inventories‚ and receivables
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Internal customer essay The internal customer is not new‚ nor is it a purely public sector concept. The idea was first used almost forty years ago to describe different forms of administrative relationships within the private sector (Sayles‚ 1964). It stemmed from an understanding that in any organisation all staff are both the providers and receivers of services and‚ critically‚ if poor internal service exists‚ then the final service to the external customer will be diminished. The quality
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The Maturity of Winnie-The-Pooh In a series of adventures Winnie-the-Pooh‚ written by Alan Alexander Milne‚ Pooh Bear may be seen as a childlike character. While it is obvious that he remains a “child” throughout the book‚ the progress that he demonstrates should not be left unnoticed. Pooh’s improvement shows that he has progressed to the next stage of a child cognitive development‚ and the way he has achieved this improvement represents child’s maturity as a slow process
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Had the American Revolution become‚ in some sense‚ inevitable? Explore the events and issues that led to the discontent between the colonies and Britain‚ and how they contributed to the imperial crisis‚ to include an analysis of what event or issue determined "the point of no return" and why? "In 1775‚ war broke out between the British and the American colonists. By 1776‚ the colonists declared themselves independent and in 1783‚ following a prolonged and bloody war‚ Britain was forced to recognize
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Every person on this planet has their own hypothesis on how all organisms are related. Some may believe that there is no correlation between any of the organisms and it has always been that way. On the other hand‚ some believe that all organisms upon this earth have changed drastically‚ and we finally reached the point that we are at today after billions of years of adaptation. Now the only way to support a hypothesis is with scientific research‚ which brings me to the point of bringing up my hypothesis
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CMMI OVERVIEW: An organization develops software in order to meet the functional needs and to keep a track of the estimated budget and time. Though many tools such as Object Oriented Language‚ middleware have been introduced‚ the Capability Maturity Model is the most widely used model in the software organizations. A software organization can be run in either as an Immature software organization where the immediate crises are solved and the employees does not meet estimated budget and schedule.
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