Which Measure of Inflation Do You Think Should Be Used

question 33

Essay

Which measure of inflation do you think should be used in capital budgeting: historical inflation or expected inflation.Explain why.

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Definitions:

Market Value

The ongoing rate at which services or assets are being traded in the market.

Organization Costs

Costs incurred in the formation of a corporation.

Retained Earnings

Retained Earnings refer to the portion of net income left after dividends are paid out to shareholders, which is then reinvested in the company or used to pay down debt.

Intangible Asset

Assets that lack physical substance but are valuable because of the advantages or rights they provide to a business.