You are a member of a team responsible for screening capital budgeting projects. Another team member has come to you in private and explained that she has become confused with so many "returns" that the team has been discussing. She has made a list of the terms she is having trouble understanding. Her list includes the following:
3. | Internal rate of return |
5. | Accounting rate of return |
6. | Unadjusted rate of return |
Required:
Prepare a brief summary of each of the above terms.