Terrified of “Returns” - Help me!
I am new to this forum. I have a fear of returns and calculating returns. This has always hindered me from pursuing finance, but I believe through practice I can become better. I have always avoided conversations in finance because of these problems. Maybe if I state my problems, somebody can help.
I don’t understand what it means when someone says “Oh this three year investment was great, it generated 3% return! I”m glad I laid out my $100,000 into this project”
- I don’t know how to calculate what the final amount he cashed out was
- I don’t know how much money he had made in year 1 and year 2.
Can someone show me how I would know?
2. I do not understand or know how to calculate when someone says, “make sure your return is greater than your cost of capital!”
- I would be so grateful if someone can walk me through a basic example of how I can prove my return is greater than my cost of capital!
Sorry for the major rant, I’m just sick of not being able to get this down.