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The function of the TATA box is
Average Accounting Return
The average annual net income of an investment divided by the average book value of the investment.
Cost of Capital
The required return necessary to make a capital budgeting project, such as building a new plant, worthwhile, including the cost of debt and equity financing.
Required Return
The minimum expected rate of return on an investment deemed acceptable to an investor, taking into account the risk level of the investment.
Payback Period
The length of time it takes for an investment to generate an amount of cash flow equal to the initial amount invested.
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