IcebergSlim
Diamond Member
- Oct 11, 2013
- 10,886
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- #661
This is depressing......Uh.....does inflation NOT "compound over time" in your universe?Uh.....why are you persisting in your self debasement?
Think of inflation as a CAGR......which, of course, it is...it is NOT an NPV calculation (which is expressed as an amount) nor is it an IRR problem....
What you are yammering about is "real return" which requires netting your nominal return for inflation.....
Financial calculators are very useful things if you have some idea what you are doing..
I can appreciate why you are a management consultant....a friend of mine who performed the same function would explain that the essential quality required was knowing how to make the right face.
That's stupid. Inflation would be a factor in choosing a discount rate, but again, we're discussing buying ingredients and selling them immediately. You're using terms for long term investments. Google it, retard.
"The compound annual growth rate (CAGR) is a useful measure of growth over multiple time periods. It can be thought of as the growth rate that gets you from the initial investment value to the ending investment value if you assume that the investment has been compounding over the time period"
What is "compounding over an investment time period to buy lettuce, tomatoes and beef and sell them as Big Macs?" You don't know what you're talking about, you don't want to learn anything and I'm going to go back to your debate style of contradiction
It's irrelevant to the discussion. You keep presenting terms to analyze long term investments in a discussion of simply buying ingredients and selling a product.
Saying that inflation compounds is true but irrelevant to that
If you acknowledge that it compounds over time, why do you deny that it represents a Compound Annual Growth Rate "problem"?
Because there's no .. wait for it .. investment. Compounding is a component of the formulas you were talking about, but they were formulas to calculate investments over time where you discount future cash flows when comparing them to the initial investment.
38
I know you have no idea what that means, but it's the answer to your question
This is brutal........you're an embarrassment to the degree you claim to hold.....
Let's go back to the very basics of TVM......
You put a dollar in the bank.....you leave it there for 5 years.........at the end of that period, the balance in your account is 1.38......
what is the rate of interest paid (assuming, for the sake of simplicity, that it is compounded annually)?
If you are an idiot, you try to calculate the 5th root of 1.38 and subtract 1....
If you are not, you plug PV=-1, FV=1.38, N=5, PMT=0 into your TVM calculator........Assuming you are not stuck in the 1980s and using an HP12c and that ridiculous RPN, you press the I/Y button......
Got it?
Now your prof throws you a slurve......
Five years ago, you bought a Big Mac for $1.00............Today you paid $1.38...........what is the (avg) annual inflation rate over the course of that time.....
If you are an idiot, you try to calculate the 5th root........(stop me if this sounds familiar).....
Do you actually expect me to believe that you passed Finance 1?