What Is the Discount Rate

In economics and finance, the term discount rate could mean one of two things, depending on context. On the one hand, it is the  interest rate at which an agent discounts future events in preferences in a multi-period model, which can be contrasted with the phrase  discount factor. On the other, it means the rate at which United States  banks can borrow from the Federal Reserve. For the purpose of this article, we will focus on the discount rate as it applies to present value — in a discrete time model of business interests, where agents discount the future by a factor of b, one finds that the rate is equal to the difference of one minus b divided by b, which can be written r(1-b)/b. This discount rate is essential to calculating the discounted cash flow of a company, which is used to determine how much a series of cash flows in the future is worth as a lump sum total today. In practical application, the discount rate can be a useful tool for investors to determine the potential value of certain businesses and investments who have an expected cash flow in the future. Time, Value, and Uncertainty Risk In order to determine the current value of future cash flow, which is essentially the point of applying the discount rate to business endeavors, one must first evaluate the time value of money and the uncertainty risk wherein a lower discount rate would imply lower uncertainty the higher the present value of future cash flow. The time value of money is different in the future because inflation causes cash flow tomorrow to not be worth as much as cash flow is today, from the perspective of today; essentially this means that your dollar today will not be able to buy as much in the future as it could today. The uncertainty risk factor, on the other hand, exists because all prediction models have a level of uncertainty  to their predictions. Even the best financial analysts cannot fully predict unforeseen events in a companys future like decreases in cash flow from a market collapse. As a result of this uncertainty as it relates to the certainty of the value of cash presently, we must discount future cash flows in order to properly account for the risk a business makes in waiting to receive that cash flow. The Federal Reserve's Discount Rate In the United States, the U.S. Federal Reserve controls the discount rate, which is the interest rate for the Federal Reserve charges commercial banks on loans they receive. The Federal Reserves discount rate is broken into three discount window programs: primary credit, secondary credit, and season credit, each with its own interest rate. Primary credit programs are reserved for commercial banks in high standings with the Reserve as these loans are typically only given for a very short time (typically overnight). For those institutions not eligible for this program, the secondary credit program can be used to finance short-term needs or resolve financial difficulties; for those with financial needs that vary throughout the year, such as banks near summer getaways or large farms that only harvest twice a year, seasonal credit programs are also available. According to  the Federal Reserves website, The discount rate charged for primary credit (the primary credit rate) is set above the usual level of short-term market interest rates... The discount rate on secondary credit is above the rate on primary credit... The discount rate for seasonal credit is an average of selected market rates. In this, the primary credit rate is the Federal Reserves most common discount window program, and the discount rates for the three lending programs are the same across all Reserve Banks except on days around a change in the rate.

Social Media Marketing An Important Marketing Tool

1 – Background: 1.1 – Topic: The author of this research proposal targets to inspect the significance of social media marketing of IT products specifically in United Kingdom. 1.2 – Introduction: The key purpose of this research proposal is to assess importance of social media marketing significantly of IT products in emerging marketing activities within Unite Kingdom. According to Kim Ko. (2012) social media marketing is an important and effective method utilised by modern marketers which improves different social networking websites to attract potential consumers and customers. A vital aim of social media marketing is create and generate appropriate subjects which can be use along with social networking for increasing company consociate†¦show more content†¦This opportunity is bring a plat form where IT producer companies can endorse different IT products and can convey message to their potential customers about innovation and new specifications of these products. Social media marketing is proving an edge to IT product producing companies on other companies as they already have expert managers and designers that are already facilitating these IT product producer c ompanies with their command on IT so they can target their consumers and customers in more positive and effective way. 2 – Literature review: 2.1 – Main body: Griffith, D. A., Cavusgil, S. T. Xu, S. (2008) summarised that modernism and globalisation has drawn trade barriers. Moreover, globalisation and advancement has associated sellers and buyers integrated with supply and demand. Marketing is an effervescent and dynamic control that is needed to adopt innovation and advancement at local and international business levels. Furthermore, Kabani, (2010) identified that IT product producer companies such as Nokia, HP, Apple, Dell, Samsung, Sony, LG etc. are concerning demands and expectations of their potential customers globally and trying to bring them to global village by using several emerging

Death and dying brochure free essay sample

The Purpose and Value of Having a Living Will: A living will is a legal document that once signed by the person whom it is pertaining to can hold or make known a persons wishes in reference to life prolonging medical treatment. It can also hold what a person would like for medical personnel or a doctor to do should an emergency arise and the family doesnt know what to do. The purpose in having a living will is so that when dying or near death if a person would like specific medical treatment d are not able to speak for themselves ot only will the family know what to do but so will medical personnel and doctors. A living will also will not be effective in its use unless you are incapacitated and unable to give orders in reference to your state of health. The value in having a living will is so that in any circumstance you become incapacitated and you do not wish to have certain medical treatments done on your to prolong your health or life they wont be done and also so that if there are medical treatment that you do want to use they can be done. We will write a custom essay sample on Death and dying brochure or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Recommendations to Someone Who is Dying and Their Loved Ones: As we all know death is not an easy thing to go through nor is dying leading up to death. Prepare Prepare Prepare.. When a family knows that someone is about to die or has died being prepared mentally can help to make the process a little more manageable. Making sure that the person has a last will and testimony and also a trust is also important. By doing this the family as well as the dying person can know that his or her wishes are being followed and everything that they want done will be according o their word. No one want to die or be dying and know that family members will be bickering and arguing over petty things instead of celebrating the wonderful life that they dying person has lived. This is a very sensitive time so knowing how to say goodbye, giving comfort and letting the person know the end is near, making sure the person is as comfortable as possible and not waiting to the end last minute to say things that you want say are all good recommendations in making the process as less stressful for everyone involved.

Orthodoxies on Growth and Transformation †MyAssignmenthelp.com

Question: Discuss about the Orthodoxies on Growth and Transformation. Answer: Introduction: The main talking point of the article centers round the risk taking while the business organizations would try to expand into the African continent. It is to be believed that the private sector in USA and the USA government should work hand-in-hand to overcome the odds and establish successful firms in Africa. The cultures between Africa and America are totally different and it is extremely important to bridge that gap (Kelsall). However, some of the Indian and Chinese companies who focus on textiles industry have decided to expand their business into Africa. Some Asian companies have already shifted their business in Africa who has been very much benefitted from this step. The textiles industry has developed quite a bit in the present time. The African countries have not been that much developed that it can ship its products to the United States. There are around 6000 textiles products that are produced in the African countries (Williams 203). The difference between the African countries and America has to be bridged in order to improve the situation. It is a matter of great concern that United States has a tradition of disregarding culture in terms of the Great Assimilation. Most of the African countries have not been benefitted from the AGOA. If the African countries desire to make an entry into the global economy, they must understand the real actors in the Western world who control the global economy. The setting up of AGOA can be considered a success only if the African countries are supported by the US government and work actively by preparing new commercial laws to support them (Williams 203). References Kelsall, Doctor Tim.Business, politics, and the state in Africa: Challenging the orthodoxies on growth and transformation. Zed Books Ltd., 2013. Williams, Brock R. "African growth and opportunity act (AGOA): Background and reauthorization."Current Politics and Economics of Africa7.3 (2014): 203.