method of yield computation used for investments. It simply divides the annual dollar income by the total dollar invested; a $10,000 investment that pays $1,000 annually thus has a 10% cash-on-cash return. More sensitive measures are internal rate of return and Yield To Maturity.
method of yield computation used for investments lacking an active secondary market, such as limited partnerships. It simply divides the annual dollar income by the total dollars invested; a $10,000 investment that pays $1,000 annually thus has a 10% cash-on-cash return. Investments having a market value and a predictable income stream to a designated maturity or call date, such as bonds, are better measured by current yield or Yield To Maturity (or to call).
equals Net Operating Income minus debt service, divided by equity invested.
