How do we handle a situation when both compounding period and cash flow interval are given to us but both are less than a year and not equal to each other?
What will be an ideal response?
Answer: Additional care should be taken when the compounding period is given to us and it does not equal the cash flow interval. This requires some additional steps in computing the applicable interest rate. The compounding interval has to match the cash flow interval to enable transformation to present value (PV) or future value (FV). In most cases, it should be possible to achieve this by calculating the effective annual rate from the given compounding interval and subsequently calculating the annual percentage rate and periodic interest rate for the cash flow interval.
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What is the waterfall planning process and when is the ideal approach to project development?
What will be an ideal response?
High-risk, high-yield junk bonds have declined in popularity over time due to ________
A) the decline in mergers and takeovers, which these bonds were used to finance B) the declining need of growth capital C) the stabilizing of interest rates D) a number of major defaults on these bonds