Explore BrainMass

Understanding ROE, ROC and IRR with an example

When expanding and investing in projects overseas it is essential to understand such things as return on equity (ROE) and internal rate of return. Using internet sources (you may want to start with the websites listed below) gather information on ROE and IRR. Post a two to three paragraph explanation of these terms and the advantages and disadvantages of using them when selecting projects to invest in overseas.

Return on Equity vs. Return on Capital
Return on Equity Definition
Keep Your Eye on the ROE

IRR Example

Select two companies from the same industry. Using the annual report information available on the company's website compute the ROE for each company.


Solution Summary

This solution contain detailed understanding of ROE, ROC and IRR with an example from the Industry to explain the concepts. The solution discuss the advantages and disadvantages of each and how we can interpret the values obtained.