Evaluating Performance
When expanding and investing in projects overseas it is essential to understand such things as return on equity (ROE) and setting hurdle rates. Using internet sources (you may want to start with the websites listed below) gather information on ROE and hurdle rates. 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
Hurdle Rate 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. Provide a 2-3 paragraph analysis of your findings.