Answer: Determine the cash flows that are most apt to occur given a set of circumstances.
Explanation:
To make a decision on a project to be implemented one must engage in the most apt of financial analysis because predicting the future is no easy task but one must try to get the most accurate of figures when trying to make a decision to enable a smooth implementation of the project.
One should also remember that there are different scenarios that may occur with a project and it is imperative that all those scenarios are researched and assigned the most apt of figures to ensure for instance, that should that scenario happen, plans can be made to fully utilize whatever opportunities it presents.
Answer:
b. 9.75%
Explanation:
We know that
Nominal rate of return = Real rate of return + inflation rate
where,
inflation rate is 4.2%
And, the nominal rate of return would be
= {(Selling price - purchase price) × number of shares purchased + dividend} ÷ (purchase price × number of shares purchased)
= {($70.25 - $62.30) × 200 shares + $148} ÷ ($62.30 × 200 shares)
= ($1,738) ÷ ($12,460)
= 13.95%
Then place these values in the formula above,
so the value would be equal to
13.94% = Real rate of return + 4.2%
So, the real rate of return would be
= 13.94% - 4.2%
= 9.74% approx
Answer:
current year prices to base year prices, holding the market basket content constant.
Explanation:
The CPI as a form of measurement, gives an examination of the weighted average of what is the cost or prices of a basket of consumer goods and services, transport, food, and medical services. We can calculate this when we take the changes in price of every singular item in the basket of goods and finding the average.
It's value can best be described as current year prices to base year prices, while holding the market basket fixed.
Answer:
The answer is A.
Explanation:
Out of all the options, only option A is the odd one out. Discount rate for determining net present value of an investment is never dependent upon the present value of the proposal's future cash flows.
Discount rate is dependent upon option B because for selecting a particular investment, alternative investment opportunities must have been considered and if the discount rate for alternative investment was better, it would have been preferred.
Also for Option C. Discount rate for risky investment will be different from the less risky.
It is also dependent upon option D because the cost of equity is always higher than the cost of debt. So it will be different.
Answer:
Very low subjective probabilities
Explanation:
The prospect theory is an economics theory developed by Daniel Kahneman and Amos Tversky. It is used in a decision making process, a decision maker multiplies the value of each
outcome by its decision weight, just as expected utility maximizers multiply utility by subjective probability. In differentiating subjective probabilities with objective probabilities, the very low subjective probabilities are overweighted.