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In Using High-Low Method, the Slope Coefficient Is Calculated by Dividing

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In using high-low method, the slope coefficient is calculated by dividing the difference between highest and lowest observations of the cost driver by the difference between costs associated with highest and lowest observations of the cost driver.


Definitions:

Discount Rate

The rate of interest that is applied to find out the present value of cash flows predicted in the future, within the framework of discounted cash flow analysis.

Present Value

The monetary valuation presently of a future sum of money or ongoing cash flows, considering a predetermined rate of return.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal, typically on an annual basis.

Discount Rate

Within DCF analysis, it's the rate employed to compute the present economic value of expected future cash inflows.

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