Management
It is important to know the internal rate of return because the percentage figure gives the speed of reinvestment that adds up to the break even value. Additionally, the Hurdle Rate is vital since it displays the financially attractive level of the investment. Further, the difference between cash flow and profit is that the amount recorded is the immediate cash in the firm’s account while the profit includes the amounts that will be paid in future. It is, however, important to get the NPV for any decision which flows into multi-periods because investment takes place over time and not just in one static period
Reading 14 (question 2)
The primary purpose of decomposition is to adjust the future forecasts to the long-term movement of the inventory. Decomposition is critically important in that it helps the management of a firm to avoid unnecessary expectations in the future movements of products. As a result, the company is put in a position where it can utilize all the resources without holding money in the form of dead inventory.
Reading 15(question 3)
In comparing simple linear regression and multiple regression, the difference is that simple linear regression has two variables where one variable is dependent on the other. On the contrary, multiple regression has more than two variables, one that is dependent and the others are independent variables. An applicable example of simple linear regression is a case where one is studying the relationship between money supply and the interest rates. An example of multiple regression is the case to determining the relationship between sales and customer base, the price of the product, and the market share.
Daniel 11 and 12 (question 4)
According to Daniel 11:36-45, God reveals what is going to happen in multi-periods. The time in the passage is in the future and the things He predicts therein are dependable because they later took place. Therefore, it is important to consider the future value of the activities in the present. According to Daniel 12, where the time frame is in the future, the sense of volatility is provided in a reliable macro way. Therefore, I can base my behavior base deducting my reasoning from the macro predictions. Time series valuation is important in making current decisions.
Works Cited
French, Nick. "The discounted cash flow model for property valuations: quarterly cash flows." Journal of Property Investment & Finance, Vol. 31 Iss: 2 (2013): 208 - 212. Document .
Tom van den Heuvel, Jaroslaw Morawski. "Performance drivers of German institutional property funds." Journal of Property Investment & Finance, Vol. 32 Iss: 2 (2014): 154 - 167. Document .
Zairy Zainol, Salina Hj. Kassim. "A critical review of the literature on the rate of return risk in Islamic banks." Journal of Islamic Accounting and Business Research, Vol. 3 Iss: 2 (2012): 121 - 137.
