fin630_db5

Apr 28th, 2015
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You know that when expanding and investing in projects overseas as Acme plans to, it is essential to understand such things as return on equity (ROE)and internal rate of return (IRR). Using Internet sources (you may want to start with the websites listed below) gather information on ROE and IRR. Post a two to three paragraph explanation for each of these terms and the advantages and disadvantages of using them when selecting projects to invest in overseas. Return on Equity vs. Return on Capital Return on Equity Definition Keep Your Eye on the ROE IRR Example Select two companies from the same industry. Using the annual report information available on the company's website compute the ROE for each company. Each of these three questions needs an answer of a

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FIN630-DB5NameClassDateProfessorFIN630-DB5 When expanding and investing in the Greenfield project overseas, the Acme Corporation will need to be well versed in things such asreturn on equity (ROE) andinternal rate of return (IRR). The return on equity (ROE) andinternal rate of return (IRR) are used to measure similar financial aspects of the corporation but using two different formulas too measure the profitability of the organization. In this case the return on equity (ROE) andinternal rate of return (IRR) will be used to measure the profitability of the Acme Corporation and determine what financial assets they have to work with. The return on equity (ROE) refers to the total percentage of profit for the acme corporation. For example, if a company's profit equals $4 million for the first quarter, and the total value of the shareholders' equity interests in the Acme Corporation equals $400 million, the return on equity would equal 1% or 4 million divided by $400 million (Tracey, 2011). This mathematical method for determining the total percentage of profit is a trusted benchmark used by a majority of organizations in America. The

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