A well-known new-immigrant language centre in Hamilton, Ontario, operates as a not-for-profit organization. Typical capital expenditure decisions
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A well-known new-immigrant language centre in Hamilton, Ontario, operates as a not-for-profit organization. Typical capital expenditure decisions involve acquiring audio-visual equipment that will provide language training for new immigrants beyond the number currently being served at the centre (hence adding revenues) and/or providing services more efficiently than currently (hence decreasing expenses). To evaluate such expenditures, the language centre uses a discount rate equal to the return on its investment trust portfolio. Explain, briefly, why it does so.
Discount RateDepending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...
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Related Book For
Cost Management Measuring, Monitoring and Motivating Performance
ISBN: 978-1119185697
3rd Canadian edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott, Liang Hsuan Chen, Gail Cook
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