What is discounting and compounding? What is the difference between them?

Q: What are the two types of discounts?

A:

Q: Can you make me a comparison and contrast of present value and future value?

A: Financial Accounting:- Financial accounting includes recording, summarizing and reporting a…

Q: WHAT IS THE VALUE OF DISCOUNTED FLOWS

A: As per Time value of money, there are present values as well as future values.

Q: What are the shortcomings of the internal rate of return criterion?

A: Solution- Internal Rate of Return (IRR)-      The Internal Rate of return (IRR) is that the discount…

Q: what does fichacuristic mean?

A: NOTE: The word "fichacuristic" is a spelling/typo error of the word "futuristic" in Step 2 first…

Q: What is meant by the term discounting?

A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…

Q: What are some recent trends regarding absolute versus relativepriority doctrines?

A: The priority rules are methods of making payments to the creditors and shareholders in case of…

Q: Explain the difference between simple and compound interest.

A: Simple Interest: It is the interest amount that is computed on the original amount of loan, that is,…

Q: What assumptions and limitations does multiples valuation have?

A: Multiple valuation or relative valuation is a market based valuation method where the target company…

Q: What are the benefits of interest tables?

A: The question is based on the concept of interest table.

Q: What is the basis for the discount rate in a DCF analysis? Describe how this rate mightbe estimated.

A: Basis of discount rate in DCF analysis is to compute the PVF of future Cash Flows expected as it is…

Q: Which of the following is true about rates?

A: Total Rate of Return: The total rate is the real rate of return made on an investment over a period…

Q: What is the concept of present value? What is discounting?

A: Present value means value of future cash flows in todays terms.

Q: What is the discounted-payback method?

A: Payback period states the number of years that is taken by the project to recover the investment of…

Q: What is intrinsic value or price?

A: Intrinsic value: Intrinsic value denotes to an investor's view of the intrinsic worth of an asset,…

Q: Explain Present Value?

A: Present value is the current value of a future sum of money or value. Present value is useful to get…

Q: What are the Differences in Maturities?

A: Maturities in the context of the bond mean that bonds are issued for a specific period of time. It…

Q: Compare the process of compounding to determine future values and the process of discounting to…

A: The concept of time money provides information as every unit value of money will decreasing its…

Q: What discount rate is used in a lessor’s NPV analysis?

A: Weighted average cost of capital is used as discount rate in Lessor's NPV analysis.

Q: What is discounting? / why do people discours?

A: As per Bartleby guidelines, If multiple questions are posted , only first 1 question will be…

Q: wHAT IS PRESENT VALUE?

A: Present value also known as PV is the value of a future sum of money discounted at specified rate of…

Q: Define the term Discounted-Payback Period?

A: The payback period states the number of years that is taken by the project to recover the investment…

Q: What makes the risk-adjusted discount rate approach appealing in practical application?

A: Answer: The discount rate may be changed to offset the risk involved in a project in order to…

Q: What is the definition of valuation allowance?

A:

Q: What is the decision rule for payback?

A: Payback period is the period of time taken by the project to recover the investment in such project…

Q: Where does the discount rate from present value came from? How to solve it?

A: In finance, a reduction rate is that the rate of come wont to discount future money flows back to…

Q: With practical examples, differentiate between compounding and discounting

A: COMPOUNDING CONVERTS THE PRESENT VALUE INTO FUTURE VALUE DISCOUNTING CONVERTS FUTURE VALUR TO…

Q: Define the term Risk-Adjusted Discount Rate Approach?

A: The estimation of the present value of cash for high-risk investment is known as a risk-adjusted…

Q: What is the discount factor?

A: Discount factor, also known as the conversion factor refers to the value which is used to calculate…

Q: What are some criticisms of the payback method?

A: Payback Period: Payback period is the period in which the project recovers its initial cost of the…

Q: what is the reconciling DIFFERENCE:

A: A bank reconciliation statement has been prepared to reconcile the balance as per pass book and…

Q: Which of these is the present value?

A: Present Value: It is the present worth of the annual cash flows discounted at a rate of interest for…

Q: . What is its present value?

A: Introduction: Compound interest can be defined as the interest on either a loan or a deposit which…

Q: What are the differences between adjunct account and a contra account?

A: Definition:An adjunct account increases the book value of a liability account.A contra Account…

Q: How does compounded interest work?

A: compound interest : it is the interest on loan calculated based on principal and interest.

Q: What is the nature of interest? Distinguish between “simpleinterest” and “compound interest.”

A:

Q: Explain Discounted Present Value Techniques?

A: Capital budgeting is the process of allocating the resources of the company in long term investment…

Q: What’s the difference between simple interest and add-on interest?

A: Interest is the amount of extra payments a borrower has to make to its lender as a return for…

Q: What should the transfer price be and why?

A: Given that: Transfer price as proposed by Top Division = $256 Price that is charge to outside…

Q: What are the advantages of simple interest?

A: Simple Interest Simple interest refers to the amount of interest that is calculated only on the…