1. Calculate the EQUIVALENT annual rate of return with daily compounding, R365. when the monthly rate of return is 9.57% and the continous is 9.53%?
2. Why does an institution create the financial assets and not people like you and me?
3. Theoretically, the NPV is the most appropriate method to determine the acceptability of a project. A false sense of security can overcome the decision-maker when the procedure is applied properly but the positive NPV results are accepted blindly. Sensitivity and scenario analysis aid in the process by:
a. providing assurance that the most appropriate discount rate is being applied.
b. ensuring all estimated values are accurate.
c. ensuring the NPV value was calculated correctly.
d. providing information on a number of potential outcomes.
e. guaranteeing the NPV will be achieved.