With practical examples, differentiate between compounding and discounting

Q: What Is Quantity Discount Analysis Illustrated?

A: Cost:   It is the economic value of resources incurred by a firm to manufacture a product or render…

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: What are the two types of discounts?

A:

Q: explain two functions of the credit uniom

A: A credit union is established as a not-for-profit organization (NPO). It consists of members who…

Q: How do you solve ration analysis

A: A financial ratio, also known as an accounting ratio, is the magnitude difference between two…

Q: Define discounting.

A: Time value of money: Time value of money refers to the concept that the value of money available at…

Q: What is meant by the term discounting?

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

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: Explain the argument for and against the use of net price method with respect to purchase discounts?

A: The Net Price Method (NPM) provides information about the purchase discounts lost by the company and…

Q: e discount rates of plement method.

A: Introduction: Net price factor is a method of business promotion that is used by companies in order…

Q: Define Purchase discounts.

A: Purchase discounts: The sellers offer a reduction in purchase price on initial purchases, to…

Q: Define pricing decisions.

A: Selling Price:   It refers to the price at which the product or service will be sold in the market…

Q: Define compounding

A: A compounding is the interest charged on interest. When any investment is made for certain years,…

Q: Differentiate between continuous compounding & continuous discounting. Which function of excel &…

A: Continuous compounding Continuous compounding is the compounding of amount for infinite time.…

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: Define each of the following terms:g. Lessee’s analysis; lessor’s analysis

A: The lessee's analysis how leasing an asset is less expensive than the purchasing of the asset.

Q: Compare standard quantity discounts to cumulative quantity discounts.

A: Cumulative Quantities Discount (CQD) is a system intended to recompense consumers after a definite…

Q: Define Purchase return.

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

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: Define credit enhancement

A: Borrowings are the liability of the company which is used to finance the requirement of the funds.…

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

A: We need to use the equation of time value of money to explain the concept of discounting and…

Q: Explain Pass-Through Rates, Yields, and Servicing Fee?

A: Pass-through rateA rate of interest being paid to the investors on the securitized asset after…

Q: Explain payment (PMT)

A: Payment is the transfer of money, goods, or services in exchange for goods and services in…

Q: Explain how to determine the transaction price.

A: Determination of transaction price is one of the step of revenue recognition process. The…

Q: Distinguish between par value and issue price.

A: Solution: Par value is a value assigned to a financial instrument issued by the company. It is…

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 invoice discounting and what are the advantages

A: Introduction: Discounting is nothing but financial process in which in exchange for a fee, a debtor…

Q: Define the term credit revenue.

A: Credit Revenue: When goods or services are sold on credit, they are recorded as revenue, but since…

Q: Give differences between Revaluation account and Realisation account.

A: Revaluation account: The revaluation account is a nominal account opened to assess the values of the…

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: Define the term dual rate method.

A: Dual-rate method refers to the method of assigning costs that uses two cost functions.

Q: What is the formulae used to find markup price?

A: Markup price is the price that the player comes up with after adding the mark up to the cost price…

Q: Define discount interest

A: Introduction: Usually, interest is the sum charged over an amount of time by the borrower for the…

Q: What’s the difference between order and volume discounts? Justify your answer.

A: Manufacturers and sellers utilize volume discount pricing, or volume discounting, to reward…

Q: Differentiate and elaborate bid rate and offer rate.

A: Following is the answer to the question.

Q: Explain quantity discount

A: Introduction: A quantity discount is an inducement obtainable to a purchaser that fallouts in a…

Q: Define Discount.

A: Accounting:   Accounting is a system, or a process of collecting and organizing economic…

Q: Define the term Non-comparable Compounding and Payment periods?

A: The question is based on the concept of interest rate calculation, which depend on the compounding…