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Hi,
I am struggling to understand the discount factor part of this computation. I understand that we need to have a positive and negative ve.
I am working through an example from a kaplan text. The book uses 12% as the discount factor but I have used 11% both give a negative ve. My answer was wrong because I had not used 12%. I think I am missing a vital step in my understanding of why 12% was chosen. Please could you help. I have watched the video but nothing has shown a light on this issue.
Many Thanks,
Hi,
It is likely that you are inputting the numbers in incorrectly to the calculator if you are getting everything else correct. Your answer should not be significantly different if you are using 11% as the discount rate.
Show me some numbers and I might be able to assist.
Thanks
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