Companies make capital investments to earn a return. This is like individuals wanting to make money when they invest in stocks and bonds. The amount of money made or lost is measured as the investment’s rate of return. When making an investment, the expected rate of return is determined by the amount, timing, and riskiness of the funds expected from the investment.
i) Amount.
An investment’s rate of return is expressed as a percentage. For example, if a company invests $1,00 and expects
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