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Rate of Inflation
02-14-2011, 04:26 PM,
Rate of Inflation
Dear AWL!!


I would like to understand that what is the resources and from where we can get the economic rate of inflation for our production plan and for future cash flows.


02-16-2011, 05:23 PM,
Inflation causes the financial assets to liquidate. The inflation would be a common accounting problem that discourage the investments. You're able to calculate the inflation rate by (CPI current year- CPI base year) x 100 / CPI base year.(CPI - Consumer Price Index)
02-16-2011, 07:17 PM,
Thanx Rathika.
02-16-2011, 07:32 PM,
I would like to understand that, Let Suppose we have invest in the new project Costing 1 Million for 5 years, start from Jan, 20x1 and we are preparing the future cash flow from this project, according to budget of company we have set out the rates of Sales, DM, DL and other OH.
It is the point which I already asked that the rate of Selling per unit, DM, DL Other OH is being change year to year due to inflation.

This rates as I understand that comes from Fiscal policy???
and what is the effect of this changing of rate ? is it accurate or approx?? like em standing on First year and prepare the cash flow from investment but how i can decided the accurate rate of 3rd Year cash flow projection???

Wat is the reason??

waiting for your favorable c0mments.



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