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.
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© 1979 Richard J. Briston and Jack Liversidge
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Briston, R.J., Liversidge, J. (1979). Inflation. In: A Practical Approach to Business Investment Decisions. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-02136-9_9
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DOI: https://doi.org/10.1007/978-1-349-02136-9_9
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-02138-3
Online ISBN: 978-1-349-02136-9
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