Term
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Definition
| determining productive assets to buy |
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Term
| hybrid combines limited liability benefits and no double taxation |
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Definition
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Term
| Sarbanes Oxley Act of 2002 |
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Definition
reduces agency costs
restores ethical conduct in business sector
improves integrity of accounting reporting system within firms |
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Term
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Definition
| only one needs to be chosen |
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Term
Success: Cash Flow NPV
IRR |
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Definition
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Term
| Practice: MIRR (DO NOT CALC CF) |
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Definition
Future cash flows 1 2 3 4 then
FV (cash flow value
PV original cost
N years |
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Term
| Budgeting desicions are most important |
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Definition
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Term
| _____ Capital Budgeting is most appropriate |
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Definition
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Term
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Definition
| discount rate making NPV over 0 |
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Term
| sunk costs not in schedule of cash flow operations |
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Definition
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Term
| _____ is used when calculating price of asset |
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Definition
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Term
| _____ interest rates will increase the value of an investment |
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Definition
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Term
| WHen having an investment where one pays now... |
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Definition
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Term
| You wrote a piece of software that does a better job of allowing computers to network than any other program designed for this purpose. A large networking company wants to incorporate your software into their systems and is offering to pay you $502,000 today, plus $502,000 at the end of each of the following six years for permission to do this. The appropriate interest rate is 7 percent, Suppose that the networking company will not start paying you until the first of the new systems that uses your soft ware is sold in two years. What is the present value of that annuity? |
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Definition
I 7
N7
Pmt 502000
fv 0
Cpt PV
PV/(1+i)^periods forward |
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Term
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Definition
(1+(quoted interest rate)/m))^(m)-1
m=compund periods in the year |
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