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

Q: Define Discount Rate.

A: A discount rate is rate which is used to bring future value of cash flow to the present value.It is…

Q: How do the Internal-Rate-of-Return Criterion relate to the PW Analysis?

A: Capital budgeting:   It is the process in which the business uses to determine which proposed fixed…

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 is meant by the term discounting?

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

Q: How to calculate Present Value Interest Factors?

A: PVIF is known as Present Value Interest Factor. PVIF refers to a factor that is very useful in…

Q: Identify the MARR (or external interest rate)?

A: A minimum acceptable rate of return (MARR) is the all-out advantage that a speculator wants to pick…

Q: What are the benefits of interest tables?

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

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: How to Calculate Compound Interest Factors and explain with example?

A: It is interest ascertained based on the starting principal and frequently contains all the collected…

Q: Which are the two computational schemes for calculating this earned interest yield?

A: The two computational schemes for calculating the earned interest yield are compound interest scheme…

Q: Write the methods of Calculating Interest?

A: Methods of calculating interest: The basic and fundamental methods for calculating interests are…

Q: why was the discount rate included in the table?

A: Discount rate is the expected rate of return for the project value which is used to convert the…

Q: Should the analyses show the sensitivity of the discounted net present value and other outcomes?

A: The question is based on the concept of a sensitivity analysis, used as a analysis tool in capital…

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: Describe in detail the Stochastic Discount Factor (SDF)and its components.

A: Stochastic discount factor is defined as the concept, which has the combination of the financial…

Q: What is the Internal-Rate-of-Return Criterion?

A: Internal rate of return (IRR): The internal rate of return (IRR) is a measure utilized in capital…

Q: Describe the discounting process?

A: discounting is the process of determining the future value into present value, In discounting time…

Q: Which different terms are used to refer to rate of return?

A: Rate of return is the return that is expected by the investors from the investment made. It is…

Q: Describe the process of using the risk-adjusted discount rateto calculate the net present value?

A: Net present value (NPV) is the excess of present value of cash inflows over the present value 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: The modified internal rate of return (MMIR) is the discount rate that forces the _____.

A: Explanation: Modified internal rate of return can be better understood from the below formula, where…

Q: What is the reinvestment rate assumption when using MIRR?

A: Modified Internal Rate of Return: This method is used to rank investments or projects for an…

Q: ernal rate of return and the discount rate turn pany's discount rate or internal rate of return unt…

A: To find the correct option as,

Q: What are the features of the discounted payback period

A: DPP is the total time taken for the initial amount to equal to be the amount of discounted value of…

Q: Explain four aspects of rate-of-return analysis?

A: The return of return is the return on investment made when the time value cashflows turns to net…

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: Distinguish between the initial rate of interest and the expected yield on an ARM. What is the…

A: Introduction: The adjustable rate mortgage is one of the method used to calculate the interest rate…

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: How can fi nancial statement analysis be used to evaluate the credit quality of a potentialfi…

A: Whenever, an investor is considering an investment proposal, he need to analyze the various things…

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 is the discounting process?

A: Discounting: It is the process where the bill is given to a bank to get the bill discounted before…

Q: The discount rate can also be referred to as the?

A:

Q: Did you use the same discount rate in the FCF vs DDM model? If so, why? If not, why not?

A: DDM model is dividend discount model which focus on the dividend provided to the shareholder,…

Q: How is the PW analysis dependent on the rate of interest used for the PW computation?

A: Net present value (or) PW analysis is one of the capital budgeting techniques. When a company is…

Q: Define discounted payback period

A: The payback Period is the time duration taken to reap back the amount invested in the project. The…

Q: how to calculate FLEV and Spread and Noncontorlling interest ratio

A: Financial Leverage is a financial ratio that represents the relationship between the total debt and…

Q: Illustrate the methods of calculating Interest?

A: Traditionally, there are two methods of calculating interest : 1. Simple interest rate method 2.…

Q: What is the Effective Rate per Payment Period?

A: Answer: The effective rate is nothing but the yearly rate under average compounding, will have…

Q: What is the discounted payback period?

A: Discounted payback period is period for which present value of cash flow is equivalent to initial…

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 is the relationship between a discount rate (or IRR) and a capitalization rate? What causes…

A: Introduction: The discount rate is nothing but a rate that reduces potential cash flows in order to…

Q: Describe the methods of calculating interest?

A: In the finance industry, every decision revolves around the interest rate. This is a crucial…

Q: How is NPW used as a Function of Interest Rate?

A: Present value computes the existing value of future benefits by discounting future worth with a…

Q: What are the four aspects of rate-of-return analysis?

A: Rate of return analysis tells the rate of return which a investment can give. It carefully analyse…