Return and owners

• The companies achieve on average a return of 11% (the alternative return = the minimum return requirement). The following figure shows what kind of attitude the owners take to their companies earning different returns in the long run.

Negative return:

the operation is closed down

Insuffiecien return:

Capital is gradually

withdrawn from the

company (at least the

periodic result is taken out)

Abnormal return:

The operations are

enlarged if possible

Sufficient return:

The operations

are continued as

before

Average return on markets =

Minimum return requirement