Why might you use the anticipated rate of inflation as the discount rate when calculating present value?
Question:
Discount Rate
Depending 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...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 58% (12 reviews)
The most common discount rate is the inflation rate Using the i...View the full answer
Answered By
Cyrus Sandoval
I a web and systems developer with a vast array of knowledge in many different front end and back end languages, responsive frameworks, databases, and best code practices. My objective is simply to be the best web developer that i can be and to contribute to the technology industry all that i know and i can do. My skills include:
- Front end languages: css, HTML, Javascript, XML
- Frameworks: Angular, Jquery, Bootstrap, Jasmine, Mocha
- Back End Languages: Java, Javascript, PHP,kotlin
- Databases: MySQL, PostegreSQL, Mongo, Cassandra
- Tools: Atom, Aptana, Eclipse, Android Studio, Notepad++, Netbeans.
Having a degree in Computer Science enabled me to deeply learn most of the things regarding programming, and i believe that my understanding of problem solving and complex algorithms are also skills that have and will continue to contribute to my overall success as a developer.
I’ve worked on countless freelance projects and have been involved with a handful of notable startups. Also while freelancing I was involved in doing other IT tasks requiring the use of computers from working with data, content creation and transcription.
5.00+
1+ Reviews
10+ Question Solved
Related Book For
Personal Finance Turning Money into Wealth
ISBN: 978-0133856439
7th edition
Authors: Arthur J. Keown
Question Posted:
Students also viewed these Corporate Finance questions
-
If the price of a gallon of regular gasoline is $2.49 and the anticipated rate of inflation in energy prices is such that this cost of gasoline is expected to rise by 5 percent per year, what is the...
-
Terminal value refers to the valuation attached to the end of the planning period; it captures the value of all subsequent cash flows. Estimate the value today for each of the following sets of...
-
Given the anticipated rate of inflation (i) of 1.7% and the real rate of interest (R) of 1.4%, find the nominal rate of interest (r) using the Fisher effect. Select one: a. 2.96% b. 3.21% c. 3.12% d....
-
Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them...
-
Assume that last year the Australian dollar was trading at $.5527, the Mexican peso at $.1102, and the British pound was worth $1.4233. By this year the U.S. dollar value of an Australian dollar was...
-
According to the WLLN (Application 1 to Theorem 9), if the r.v.s X 1 ,...,X n are i.i.d. with finite X 1 , then The following example shows that it is possible for {S n /n} to converge in probability...
-
how to test a slope for statistical significance
-
Ernest A. Kotsch executed a durable power of attorney when he was 85 years old, giving his son, Ernie, the power to manage and sell his real estate and personal property and to do all acts necessary...
-
If bond interest expense is $820,000, bond interest payable increased by $8,000 and bond discount decreased by $2,600, cash paid for bond interest is: Multiple Choice $814600. $825 400. $80.600...
-
a. Using the DOT PROJECT Table, describe an example that illustrates the insertion anomaly. b. Using the DOT PROJECT Table, describe an example that illustrates the deletion anomaly. c. Using the DOT...
-
Why might an investor require a greater expected return for an investment of longer maturity? Do you feel you can forecast inflation 2 years from now with greater accuracy than inflation in 20 years?
-
Richard Gorman is 65 years old and about to retire. He has $500,000 saved to supplement his pension and Social Security and would like to withdraw it in equal annual dollar amounts so that nothing is...
-
Sketch the solid obtained by rotating the region underneath the graph of the function over the given interval about the y-axis, and find its volume. (x) = x 1 , [1, 3]
-
Waverly Company Ltd. currently produces 8,000 units per year of SB 200 (snowboard), which is a component of the company's major products. SB 200 has the following unit cots Direct materials - $35.50...
-
Norton Ltd manufactures a single product, which is sold for $150 per unit. The standard variable costs per unit of the product are: Direct material 4 kilos at $8 per kilo Direct labour 5 hours at $10...
-
QUESTION 4 Murni Selasih Bhd is considering investing in a project that will generate higher returns Currently, the company has two projects with forecasted outcomes under consideration. The possible...
-
ABC plans to sell 60,000 units of product 751 in June, and each of these units requires five sq. ft. of raw material. Additional data is as follows: Product Raw No. 751 Material Actual June 1 11,200...
-
Case: Tom has felt anxious and constantly on edge over the past 3 years. He has few social contacts because of his nervous symptoms. He is married with 3 children and worries about if he is a good...
-
Which of the following financial statements are required for a Debt Service Fund? a. Balance Sheet only. b. Statement of Revenues, Expenditures, and Changes in Fund Balance only. c. Balance Sheet and...
-
Complete problem P10-21 using ASPE. Data from P10-21 Original cost ................................................................. $7,000,000 Accumulated depreciation...
-
How would you evaluate what Sue has done so far? What is positive? Negative? Sue Handly, MD, was recently recruited into a multispecialty group of 40 physicians. The clinic offered a wide scope of...
-
The financial statements and industry norms are shown below for Pamplin, Inc.: a. Compute the financial ratios for Pamplin to compare both for 2012 and 2013 against the industry norms. b. How liquid...
-
The financial statements and industry norms are shown below for Pamplin, Inc.: a. Compute the financial ratios for Pamplin to compare both for 2012 and 2013 against the industry norms. b. How liquid...
-
After graduating from college in December 2011, Alyssa Randall started her career at the G& S Corporation, a small- to medium- sized warehouse distributor in Nashville, Tennessee. The company was...
-
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments --Molding and Fabrication. It started, completed, and...
-
Horizontal Analysis The comparative accounts payable and long-term debt balances of a company are provided below. Current Year Previous Year Accounts payable $47,286 $63,900 Long-term debt 85,492...
-
On January 1, Year 1, Price Company issued $140,000 of five-year, 7 percent bonds at 97. Interest is payable annually on December 31. The discount is amortized using the straight-line method. Record...
Study smarter with the SolutionInn App