Accounting Rates of Return Under Inflation
Accounting Rates of Return Under Inflation
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In our eReader you can find the full English version of the book. Read Accounting Rates of Return Under Inflation Online - link to read the book on full screen. Our eReader also allows you to upload and read Pdf, Txt, ePub and fb2 books. In the Mini eReder on the page below you can quickly view all pages of the book - Read Book Accounting Rates of Return Under Inflation
What reading level is Accounting Rates of Return Under Inflation book?
To quickly assess the difficulty of the text, read a short excerpt:
97 7. 98 12. 99 10 4. 86 7. 77 12. 61 20 4. 67 7. 39 11. 88 50 4. 26 6. 56 10. 33 Nominal rate 5% 8% 13% of interest The accounting rates are all smaller now than above. For example, with a life of 20 years and an inflation rate of 5%, real growth of 5% causes the accounting rate to fall from 9. 57% to 7. 39%. This is below the 10 nominal rate of interest of 8% because the real growth rate of 5% now exceeds the real interest rate of 3%. This has the additional effect of causing accounting rates... to fall as the life of the asset increases. This fall should be compared with the increase in rates above, due to a zero rate of growth. Finally, it should be noted that while the range of rates increases with increasing inflation, the range decreases as one approaches closer to the Golden rule equilibrium point.
The disturbing feature of this analysis is that low-growth companies will show higher accounting rates of return than fast-growing firms, ceteris paribus. This, by itself, is not necessarily bad.
What to read after Accounting Rates of Return Under Inflation?
You can find similar books in the "Read Also" column, or choose other free books by Michael F Van Breda to read onlineMoreLess
To quickly assess the difficulty of the text, read a short excerpt:
97 7. 98 12. 99 10 4. 86 7. 77 12. 61 20 4. 67 7. 39 11. 88 50 4. 26 6. 56 10. 33 Nominal rate 5% 8% 13% of interest The accounting rates are all smaller now than above. For example, with a life of 20 years and an inflation rate of 5%, real growth of 5% causes the accounting rate to fall from 9. 57% to 7. 39%. This is below the 10 nominal rate of interest of 8% because the real growth rate of 5% now exceeds the real interest rate of 3%. This has the additional effect of causing accounting rates... to fall as the life of the asset increases. This fall should be compared with the increase in rates above, due to a zero rate of growth. Finally, it should be noted that while the range of rates increases with increasing inflation, the range decreases as one approaches closer to the Golden rule equilibrium point.
The disturbing feature of this analysis is that low-growth companies will show higher accounting rates of return than fast-growing firms, ceteris paribus. This, by itself, is not necessarily bad.
What to read after Accounting Rates of Return Under Inflation?
You can find similar books in the "Read Also" column, or choose other free books by Michael F Van Breda to read onlineMoreLess
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