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Equivalent annual benefit |
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Definition of Equivalent annual benefitEquivalent annual benefitThe equivalent annual annuity for the net present value of an investment project.
Related Terms:Accidental Death Benefit (ADB)Coverage against accidental death usually payable in addition to base amount of coverage. Accumulated Benefit Obligation (ABO)An approximate measure of the liability of a plan in the event of a Annual fund operating expensesFor investment companies, the management fee and "other expenses," Annual percentage rate (APR)The periodic rate times the number of periods in a year. For example, a 5% annual percentage rate (APR)Interest rate that is annualized using simple interest. Annual percentage yield (APY)The effective, or true, annual rate of return. The APY is the rate actually Annual PremiumYearly amount payable by a client for a policy or component. Annual reportYearly record of a publicly held company's financial condition. It includes a description of the Annual ReportThe report required by the Stock Exchange for all listed companies, containing the company’s financial statements. Annual reportA report issued to a company’s shareholders, creditors, and regulatory annual returnThe fund return, for any 12-month period, including changes in unit value and the reinvestment of distributions, but not taking into account sales, redemption, distribution or other optional charges or income taxes payable by any unitholder that would reduce returns. Annualized gainIf stock X appreciates 1.5% in one month, the annualized gain for that sock over a twelve Annualized holding period returnThe annual rate of return that when compounded t times, would have Automatic Benefits PaymentAutomatic payment of moneys derived from a benefit. BenefitAn instruction that pays a cash amount upon the occurrence of a specific event. Benefit Ratio MethodThe proportion of unemployment benefits paid to a company’s Benefit ValueThe amount of cash payable on a benefit. Benefit Wage Ratio MethodThe proportion of total taxable wages for laid off benefits-provided rankinga listing of service departments in an order that begins with the one providing the most service Bond-equivalent basisThe method used for computing the bond-equivalent yield. Bond equivalent yieldBond yield calculated on an annual percentage rate method. Differs from annual Bond-equivalent yieldThe annualized yield to maturity computed by doubling the semiannual yield. Bond Equivalent YieldBond yield calculated on an annual percentage rate method cafeteria plan a “menu” of fringe benefit options that includecash or nontaxable benefits CASH AND CASH EQUIVALENTSThe balance in a company’s checking account(s) plus short-term or temporary investments (sometimes called “marketable securities”), which are highly liquid. Cash and equivalentsThe value of assets that can be converted into cash immediately, as reported by a Cash equivalentA short-term security that is sufficiently liquid that it may be considered the financial Cash-equivalent itemsTemporary investments of currently excess cash in short-term, high-quality Cash EquivalentsHighly liquid, fixed-income investments with original maturities of three months or less. Cash EquivalentsInstruments or investments of such high liquidity and safety that they are virtually equal to cash. Certainty equivalentAn amount that would be accepted in lieu of a chance at a possible higher, but Common stock equivalentA convertible security that is traded like an equity issue because the optioned Corporate taxable equivalentRate of return required on a par bond to produce the same after-tax yield to Cost-Benefit AnalysisThe calculation and comparison of the costs and benefits of a policy or project. cost-benefit analysis the analytical process of comparing therelative costs and benefits that result from a specific course Cost-benefit ratioThe net present value of an investment divided by the investment's initial cost. Also called Coupon equivalent yieldTrue interest cost expressed on the basis of a 365-day year. Death BenefitAmount paid on death of an insured. Defined benefit planA pension plan in which the sponsor agrees to make specified dollar payments to Defined Benefit PlanA pension plan that pays out a predetermined dollar Effective annual interest rateAn annual measure of the time value of money that fully reflects the effects of effective annual interest rateInterest rate that is annualized using compound interest. Effective annual yieldannualized interest rate on a security computed using compound interest techniques. Effective Annual Yieldannualized rate of return on a security computed using compound Equivalent annual annuityThe equivalent amount per year for some number of years that has a present Equivalent annual cash flowAnnuity with the same net present value as the company's proposed investment. Equivalent annual costThe equivalent cost per year of owning an asset over its entire life. equivalent annual costThe cost per period with the same present value as the cost of buying and operating a machine. Equivalent bond yieldannual yield on a short-term, non-interest bearing security calculated so as to be Equivalent loanGiven the after-tax stream associated with a lease, the maximum amount of conventional Equivalent taxable yieldThe yield that must be offered on a taxable bond issue to give the same after-tax equivalent units of production (EUP)an approximation of the number of whole units of output that could have been Fixed-income equivalentAlso called a busted convertible, a convertible security that is trading like a straight Flat benefit formulaMethod used to determine a participant's benefits in a defined benefit plan by Incremental costs and benefitsCosts and benefits that would occur if a particular course of action were Living BenefitSome insurance companies include this benefit option at no cost to their policy holders. The insurer considers on a case to case basis, the need for insurance funds before death. If the insured can demonstrate a shortened life of less than two years and with some insurers one year, the insurer will consider releasing up to 50% or a maximum of $100,000 of the life insurance coverage held by the insured. Not all insurers offer this benefit for free. The need has resulted in specific stand alone living benefit/critical illness policies coming into existence. Look under "Different types of Life Insurance" for further information. You might have heard of "Viatical Settlements", the practice of seriously ill people selling the rights to their life insurance policies to third parties. This practice is common in the United States but has not caught on in Canada. Net benefit to leverage factorA linear approximation of a factor, T*, that enables one to operationalize the Nominal annual rateAn effective rate per period multiplied by the number of periods in a year. Pension Benefit Guaranty Corporation (PBGC)A federal agency that insures the vested benefits of Stated annual interest rateThe interest rate expressed as a per annum percentage, by which interest Target Benefit PlanA defined benefit plan under which the employer makes tax benefit (of depreciation)the amount of depreciation deductible for tax purposes multiplied by the tax rate; Unit benefit formulaMethod used to determine a participant's benefits in a defined benefit plan by Workers' Compensation BenefitsEmployer-paid insurance that provides their employees with wage compensation if they are injured on the job.
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