Adjusting Rate of Return and Present Value for Price-Level Changes.

Richard M. Duvall; James Bulloch

doi:10.2308/tar-4482743

Adjusting Rate of Return and Present Value for Price-Level Changes.

Richard M. Duvall¹; James Bulloch²

¹ Assistant Professor of Statistics, College of Business Administration, University of Texas. 1 · ² Assistant Professor of Accounting, University of Michigan. 2

The Accounting Review 1965

Abstract We have given formulas to aid in the computation of real rates of return and present values if price-level changes have occurred or are anticipated, in order to better evaluate the performance of various assets or the feasibility of acquiring an asset. It has been demonstrated that price-level changes can seriously distort the rate of return realized on an investment. Finally, it has been argued that one should consider price-level changes, actual or anticipated, before appraising the performance of an asset or purchasing one.

DOI: 10.2308/tar-4482743
Volume: 40 (3)
Pages: 569-573
Language: en
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