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The diagram below illustrates the process of
Required Return
The minimum gain or profit that investors expect to receive on an investment relative to its risk.
Average Accounting Rate
A financial metric that represents the average rate of return earned on investments or assets, based on accounting values.
Net Income
The total profit of a company after all expenses, including taxes and operational costs, have been deducted from total revenues.
Up-front Costs
Initial expenses required to start a project, product, or service before any financial return is seen.
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