Inflation

Richard J. Briston and Jack Liversidge
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Richard J. Briston: University of Strathclyde
Jack Liversidge: Leeds Polytechnic

Chapter 9 in A Practical Approach to Business Investment Decisions, 1979, pp 192-200 from Palgrave Macmillan

Abstract: Abstract Although experience in recent years had suggested that inflation should be regarded as almost inevitable research has shown that many companies ignore it in investment evaluation. In a 1974/75 survey of 81 business organisations of all sizes, 19 organisations ignored inflation completely (W7). The reasons for ignoring inflation were not elicited but they possibly included the following: 1. It is often argued that inflation will affect all flows evenly and can therefore be ignored, e.g. where it is anticipated that cost inflation will be passed on in selling prices so that current margins are maintained. 2. Impracticability of forecasting the effects of inflation on cash flows.

Keywords: Cash Flow; Inflation Rate; Trade Creditor; Capital Expenditure; Monetary Cost (search for similar items in EconPapers)
Date: 1979
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-02136-9_9

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DOI: 10.1007/978-1-349-02136-9_9

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