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Illustrate the concept of present value.
The Concept of Present Value:
While someone borrows money for a year, there the interest rate is the price, computed as a percentage of the amount borrowed, which charged by the lender.
The interest rate can be utilized to compare the value of a dollar realized nowadays along with the value of a dollar realized later, since this correctly measures the cost of delaying a dollar of benefit as well as the benefit of delaying a dollar of cost.
The present value of one dollar realized one year by currently is equal to $1/(1 + r): that is the amount of money you should lend out today sequentially to have $1 into one year. This is the value to you now of $1 realized one year by currently. The present value formula is equivalent to $1/(1 + r)N.
Whether the net present value of a project is present value of present and future benefits minus the current value of present and future costs.
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Using the discounting principle calculate the present value of an annuity of five years at Rs. 500 payments made at the end of each of the next five years at 10% interest. stion..
Q. Explain Supernormal Equilibrium? Supernormal Equilibrium: E is the point of stable equilibrium as MC = MR and MC cuts the MR from below. Figure: Supernormal Equ
WHAT ARE THE FORMS OF COST FUNCTIONS?
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Q. What is the economic role of government? What are the roles? Meaning: economic role is the role played by the government in uplifting the economy. The important roles: 1.
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