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- They are also very dependent on discount rates since most ultimate disposal costs will be incurred far in the future.
- The (opportunity) costs of capital are reflected in the discount rate.
- A sensitivity analysis covering the relevant factors (such as the price of energy or other resource, the cost of raw materials or production costs, discount rates) and, where appropriate, external environmental costs,
- What action it intends to take to prevent the efforts to reduce debt not being nullified by the increase in the cost of debt/the discount rate? 2.
- The discount rate for all three methods of evaluation is based on Weighted Average Cost of Capital equal to 10,25 %.
- A lower discount rate should be considered to increase the present value of societal benefits and costs.
- Perform calculation on the sensitivity analysis for the main costs and for energy costs and the applied discount rate for both macroeconomic and financial calculation.
- An entity shall determine the present value of the future service cost using the same discount rate as that used in the calculation of the defined benefit obligation at the balance sheet date.
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- These estimates involve assumptions about such items as the risk adjustment to cash flows or discount rates used, future changes in salaries and future changes in prices affecting other costs.
- These estimates involve assumptions about such items as the risk adjustment to cash flows or discount rates, future changes in salaries and future changes in prices affecting other costs.
- Therefore, if the discount rate includes the effect of price increases attributable to general inflation, future cash flows are estimated in nominal terms.
- Estimates of future cash flows and the discount rate reflect consistent assumptions about price increases attributable to general inflation.
- A sensitivity analysis shall be included to assess the costs and benefits of a project or group of projects based on different energy prices, discount rates and other variable factors having a significant impact on the outcome of the calculations.
- optimal calculations, the sensitivity analysis should at least address the energy price developments and the discount rate; ideally the sensitivity analysis should also comprise future technology price developments as input for the review of the calculations.
- For the purpose of the cost
- If the discount rate excludes the effect of price increases attributable to general inflation, future cash flows are estimated in real terms (but include future specific price increases or decreases).
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