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hi
May i ask if there is any standard on decimal places on workings and answers for NPV calculations and other AFM questions
foreign currency rates
inflation adjusted prices
cost of equityIs there anything such as too much rounding off
There is no standard – for most things rounding is not particularly relevant (as is the case in real life – certainly as regards NPV calculations).
Usually do NPV calculations to the nearest 1,000 $’s.
Foreign currency rates, usually to 4 decimal places (because that is how they are quoted in practice).
Cost of equity – usually to 2 decimal places.I do mention all of the above in my free lectures.
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