discounting rate for calculating present value
This query is : Resolved
26 January 2010
the future cash flows are discounted to the present value using the required rate of return.
which rate of return should be taken for this purpose, before tax or after tax?
thanks
which rate of return should be taken for this purpose, before tax or after tax?
thanks
26 January 2010
Anshu i would like to restate ur question u already mentioned that it required ur req rate of return.... U hv to take at least risk free return nd depends upon ur investment or industry specific that what u can earn if u deploy funds elsewhere
27 January 2010
required rate of return shall be equal to cost of capital.
cost of capital is considered after tax.
So the rate of return shall be taken after tax for computing the Present value of cash flow after tax.
cost of capital is considered after tax.
So the rate of return shall be taken after tax for computing the Present value of cash flow after tax.
27 January 2010
thanks sir,
my query has resolved by it-self.
my query has resolved by it-self.
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