There are many projects that exist around the world that aims to improve the city’s infrastructure. One of the leading corporations in the world of technology as well as finance has made its mark on the cities within the state of Iowa. Many large organizations such as Apple has many ways to assess their projects. I am introducing four ways to Apple as well as their explanations of project assessment methods the organization used to assess their projects. The four methods are internal rate of return, net present rate, payback, and the accounting rate of return. Apple teamed up the state of Iowa to improve cities within the state by supporting a project that would add jobs, roads, and public infrastructure such as parks, libraries, etc. It was …show more content…
One would determine worthiness of the investment based on how high the Internal rate or return is compared to the hurdle rate of the company. We all know that with every method it will have its advantages as well as disadvantages. The direct measure of the dollar value is a great benefaction in reference to the stockholder(s) is seen as advantage. Another advantage is the visual that the stocker holder(s), employees, and the public have on the return on which has been invested on the original money put forth for the initial project. Individuals criticize (disadvantage) the Internal rate of return based on the project size not being measured in any shape of form. One would also say a disadvantage is also identified when a project has a negative cash flow during the duration of the project. Then when you look at the net present …show more content…
Then one would have to determine when the break point would be obtained. The payback method does take into consideration of the cost of capital as well as the inflation (advantage). This method has one major disadvantage in which it does not consideration is the time value of money. This leaves the last method. The accounting rate of return is the profit that one is expected to receive based on the money that has been invested (Merritt,2018). An advantage can be seen by one quickly after he or she computed average rate of return. Then one can determine very quick if he or she if the number are lucrative enough to continuing this project. Also, this same advantage one could also draw a disadvantage from it as well because it does not consider the time value of money as