Difference between real and nominal cash flow is that nominal cash flows uses the inflation information as well for calculation of nominal cash flow of future while real cash flow don't use that information for calculation.
TVM, or Time Value of Money can certainly be used to calculate a real return. The only difference between a nominal return and a real return is inflation, so simply discount your future cash flows by anticipated inflation and you have a real return. In simpler terms assuming inflation is steady you could simply deduct inflation from your nominal return. For example a nominal 7% return with 3% inflation could be desribed as a 4% real return.
nominal GDP and real GDP.
Cash flow notes ensure that one who borrows will repay the amount that one has taken. Cash flow notes are typically used in business, factoring, structured settlements, and real estate.
Nominal InterestA nominal interest rate is the interest rate that does not compensate for inflation. This is used in relation to "effective interest rate" or "real interest rate."" Real Interest Rate = Nominal Interest Rate - Inflation Rate " Improvement suggested by Palash Bagchi.
circumstances: a. when investors calculate the tax on returns, they use nominal returns,because tax on nominal returns is less than real returns in order to adjust profits.
Assuming we're using the cash-flows (Cf) and the required return rate (r) to calculate the Net Present Value (NPV), We need to follow the Rule of Consistency, which is to say, if our (r) is stated in real terms, we must use Real (Cf), and vice versa. Helpful formulas: To adjust Real (Cf) to Nominal, we compound it (n) periods, using the rate of inflation (inf), viz: (Cf-real) * (1+inf)^(n) Similarly, to adjust Nominal (Cf) to Real, we discount it viz: (Cf-nominal) / (1+inf)^(n) The Fisher Theorem illustrates the relation between real and nominal rates, viz: (1+r-nom) = (1+r-real) * (1+inf)
It is not a personal a/c, nor a nominal account, alike cash it is real a/c.
TVM, or Time Value of Money can certainly be used to calculate a real return. The only difference between a nominal return and a real return is inflation, so simply discount your future cash flows by anticipated inflation and you have a real return. In simpler terms assuming inflation is steady you could simply deduct inflation from your nominal return. For example a nominal 7% return with 3% inflation could be desribed as a 4% real return.
nominal GDP and real GDP.
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A real interest rate and a nominal interest rate are quite similar. The only real difference between the two interest rates are that a nominal interest rate include the cost of inflation where as the real interest rate does not.
I have trouble in doing accounting work in real estate cash flow game. I have add. And it is very confusing. Can you help. Thank You Jerome Back
Cash flow notes are legal documents that promise the borrower will repay the lender. There are currently 60 types of cash flow notes. Read more at http://askville.amazon.com/exact-definition-term-cash-flow-notes/AnswerViewer.do?requestId=32026025.
Yes, a cash account is a real account in accounting. Real accounts represent tangible assets, and cash is considered a tangible asset because it is a physical form of currency.
Typically, nominal accounts are closed on a periodic basis..iincome and expense are nominal accounts. Real accounts ...such as cash, accounts receivable, accounts payable are real accounts are not closed and are carried forward to subsequenr periods.
Answers.Yahoo.com and Real-Estate-Online both have good definitions of what cash flow notes are.
Unearned ravenue is liability account as revenue is not yet earned but cash received.