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When taking a cash discount then return the item how much do you get back?
Wiki User
∙ 12y ago
You can only be refunded the amount that you paid, you don't get to make a profit on the transaction.
Wiki User
∙ 12y ago
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When cash flows have been adjusted for inflation but that the discount rates are nominal will this lead to an underestimation of NPV.?
Yes.
How business valuation works?
There exist 3 main ways in which businesses can be valued. The first is the multiples method (earnings are multiplied by an industry standard number), the second is the assets method (the business is worth the liquidatable value of its assets), and the third and most accurate is the Discounted Cash Flow methodology. This method is far more complicated, and is typically utilized by finance experts. The oversimplification is the business is worth the sum of all of its future cash flows, discounted back to the present using a discount rate. The discount rate includes inflation, risk adjusted return on investment, and other factors. I had my business valued by EZaluate.com and was extremely pleased with their work. They use the DCF method and it was only $149.
What is book yield?
The "book yield" is a measure of a bond's recurring realized investment income that combines both the bond's coupon return plus its amortization. It is defined as the bond's Internal Rate of Return (IRR) of all its cash flows. The following example illustrates the concept of book yield. A $100 par bond having a 5% coupon to be paid annually at year end is purchased for a $95 purchase price at the beginning of the year. The bond is set to mature in three years. In this example, the book yield will be greater than the 5% coupon on the discount bond as the investor will receive both the 5% coupon and the difference between purchase price and maturity value (an additional $5). The book yield at purchase will be 6.90%, which is the internal rate of return or IRR of the cash flows. The $5 discount is amortized into income over the life of the bond and the book value of the bond is increased until it reaches its par value of $100 at maturity.
What is the name given to large farms that grow cash crops?
Truck farm is the name given to a large farm that grows cash crops. A cash crop is an agricultural crop which is grown for sale to return a profit. rather than for the farmer's own use.
What is an example of a cost-benefit analysis that is not straightforward?
If the benefits and costs occur in different time periods, it may be necessary to discount the future cash flows to their current equivalent worth.
Is Cash Discount received on cash sales?
Cash discounts are received on cash sales. The seller or provider often refers to the cash discount as a sales discount.
Is amortization of discount on investment in bonds added or subtracted in converting net income to the net cash flow?
Amortization of discount is added back to net income as there is no actual cash outflow due to amortization and that's why it is added back to cash flow from operating activities.
What is the journal entry for a cash purchase with discount?
Debit purchasesCredit cash / bankno entry for trade discount and in case of cash discount:Debit purchasesCredit cash / bankcredit discount
What is the meaning of a cash rebate?
A cash rebate is a type of credit card that gives the user a discount by refunding some of the price back to the user or cash back as it's called in some places.
What is cash discount?
A discount given to the buyer if he/she pays in cash rather than credit
When evaluating projects using the internal rate of Return are projects with a lower early year cash flow preferred at higher discount rates?
Yes it is true. When evaluating projects using internal rate of return projects having higher early year cash flows tend to be preferred at higher discount rates.
Can you return the cash got for selling your game at gamestop and get your game back?
no but you can buy the game back
Can you Give some examples of cash discount and trade discount?
can you give some example if cash discounts?
Difference between trade discount and cash discount?
A trade discount occurs when an item is offered along with another item that is paid for. A cash discount is a reduction in the price of an item.
Bring out the difference between trade discount and cash dicount?
Cash discount is the discount in amount in accounts payable while trade discount is on sales price discount which is not recorded in business books and transaction is recorded at discount price.
What is trade and cash discount?
Trade discount is the discount which is in actual sale price of unit at the time of sales and never shown in books of accounts. Cash discount is the discount in value of accounts receivable after sales completed.
What to consider before deciding on whether to offer a cash discount?
We should consider the due date for the cash discount.
