Explain the concepts of compounding and discounting


Assignment

The purpose of the Discussion Board is to allow students to learn through sharing ideas and experiences as they relate to course content and the DB question. Because it is not possible to engage in two-way dialogue after a conversation has ended, no posts to the DB will be accepted after the end of each unit.

Using your text, course materials, the AIU library, and the Internet, provide an answer to the following topics:

• In 4-5 paragraphs, address the following:

o Explain the concepts of compounding and discounting as they relate to capital investment.

o Discuss why compounding and discounting are important to capital budgeting.

o Discuss how managers can ensure that the rate being used for compounding or discounting is the true or correct rate.

 As part of your answer, provide applicable examples.

• Post a new topic to the Discussion Board that contains your responses to the above questions.

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