﻿ define the rate of return

# define the rate of return

Of these, marginal rate of return is one of the most valuable tools for a company to determine the most profitable level of production. Relatively simple to calculate and to understand, the indicator conveys a wealth of knowledge in one easy number. Definition. Similarly, the final value of an investment, Vf, also does not always have a clearly defined monetary value, but for purposes of measuring ROI, the final value must be clearly stated along with the rationale for this final value.[citation needed]. The rate of return can be calculated over a single period, or 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. Rate of Return: The gain or loss on an investment over a specified period, expressed as a percentage increase over the initial investment cost. Gains on investments are considered to be any income received from the security plus realized capital gains. Rate of return can also be defined as the net amount of discounted cash flows received on an investment.The rate of return calculation for stocks and bonds is slightly different. Assume an investor buys a stock for 60 a share, owns the stock for five years, and earns a total amount of 10 Mathematically the value of the investment is assumed to undergo exponential growth or decay according to some rate of return (any value greater than -100), with discontinuities for cash flows, and the IRR of a series of cash flows is defined as any rate of return that results in a net present Define Rate of Return. From: Internet Comment Copy link January 19.What is Rate Of Return? definition and meaning. In purchasing the recently foreclosed house in an area experiencing gentrification, the new owner sought to make a significant rate of return by converting it to a rental Summary Definition. Define Accounting Rate of Return: ARR means the percentage income that an investment will make over a period of time calculated by dividing the investment income by the investment cost. Rate of return definition at Dictionary.com, a free online dictionary with pronunciation, synonyms and translation. Look it up now!Word of the Day. Nearby words for rate of return. The Internal Rate of Return, or IRR, is an important calculation used in real estate to compare investments to each other. When we invest in real estate, we Definition of rate of return. noun. the amount of interest or dividend which comes from an investment, shown as a percentage of the money invested. Define Return Rate. Return Rate synonyms, Return Rate pronunciation, Return Rate translation, English dictionary definition of Return Rate.