Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. What is Purchasing Power Risk?
Variations in the returns are caused also by the loss of purchasing power of currency. Inflation is the reason behind the loss of purchasing power. The level of inflation proceeds faster than the increase in capital value. Purchasing power risk is the probable loss in the purchasing power of the returns to be received. The rise in price penalizes the returns to the investor, and every potential rise in price is a risk to the investor. The inflation may be demand-pull or cost-push inflation.
In the demand-pull inflation, the demand for goods and services are in excess of their supply. At full employment level of factors of production, the economy would not be able to supply more goods in the short run and the demand for products pushes the price upward. The supply cannot be increased unless there is an expansion of labor force or machinery for production. The equilibrium between demand and supply is attained at a higher price level.
The cost-push inflation, as the name itself indicates that the inflation or the rise in price is caused by the increase in the cost. The increase in the cost of raw material, labor and equipment makes the cost of production high and ends in high price level. The producer tries to pass the higher cost of production to the consumer. The laborers or the working force try to make the corporate to share the increase in the cost of living by demanding higher wages. Thus, the cost push inflation has a spiraling effect on price level.
Capitalization ratios are used for determining the extent to which the corporation is trading on its equity, and the resulting financial leverage. These ratios
A regional division of a water company is upgrading its water filtration & purification plant; the new system is expected to last 20 years & to cost $40m. The parent company has ha
1. Discuss the various techniques of cash management for an efficient working capital Management. 2. Discuss the MM Hypothesis of Capital structure and its importance in corpo
Assume that you have just "run out of money" and are unable to move your "idea" from its development stage to production and the startup stage. However, you remain convinced that
A company has the opportunity to sell an old machine. The machine is fully depreciated to a zero book value but could be sold for $5,000. If the company did not sell the machine, i
Briefly explain the accounting concepts which guide the accountant at the recording stage.
Common Size Financial Statement Common Size Financial Statement is a company financial statement that shows all items as percentages of a common base figure. This kind of finan
Nortel is considering the purchase of a new call routing system. The system will cost $50M to purchase, an additional $7M to install, and will last for 30 years. The CCA rate as
Q. What do you mean by Equity? Equity - Residual INTEREST in ASSETS of an entity which remains after deducting its LIABILITIES. Additionally, amount of a business' total assets
Mathematical Property The sum of the deviations of the items from median, ignoring signs, is the least. For example, the median of 6, 10, 14, 18 and 22 is 14. The deviations fr
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd