Friday, January 04, 2013 10:46:43 AM
>>C1 = 20000/2*(1+0,07)*2 = 2140. . .that is fair if the Average invested capital = 20000 <<
This obviously is a typing error should be:
C1 = 20000*(1+0,07*2) = 21400. . .that is fair if the Average invested capital = 20000
I had corrected it earlier but did not Update the text
In the above it is obvious also that if one uses an average ficticious investment for a period for comparing the yield and then assumes the yield arises from a compounding growth process the Yield Percentage becomes lower!
This obviously is a typing error should be:
C1 = 20000*(1+0,07*2) = 21400. . .that is fair if the Average invested capital = 20000
I had corrected it earlier but did not Update the text
In the above it is obvious also that if one uses an average ficticious investment for a period for comparing the yield and then assumes the yield arises from a compounding growth process the Yield Percentage becomes lower!
Conrad Winkelman
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