How does a company set a discount rate


Please answer each question in one paragraph:

1) Under which category is restricted cash reported on the Balance Sheet? Can you provide some examples?

2) If I am compounding then I am looking for the future value of a lump-sum or an annuity.

In both cases a % is used. Discuss about what this rate means in PV and FV calculations. How does a company set a discount rate? How about a compounding rate?

 

 

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Accounting Basics: How does a company set a discount rate
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