A High Return on Assets Indicates

question 214

Multiple Choice

A high return on assets indicates

• A) a profitable company.
• B) the amount of sales generated by each dollar invested in total assets.
• C) new assets need to be purchased.
• D) the company may be in financial difficulty.

---

Definitions:

NPV

Net Present Value - a calculation used to assess the profitability of a project or investment by summing the present values of all cash flows associated with it.

IRR

Internal rate of return. A capital budgeting technique that rates projects according to their expected return on invested funds. The higher the return the better.

MIRR

Modified Internal Rate of Return (MIRR) is a financial metric that evaluates the profitability of investments, adjusting the internal rate of return (IRR) to account for the reinvestment of cash flows at a different rate.

Present Value

The current value of a future amount of money or stream of cash flows, discounted at a certain interest rate.