|Factor of Production|
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Definition of Factor of Production
Factor of Production
A resource used to produce a good or service. The main macroeconomic factors of production are capital and labor.
the present value of a finite stream of cash flows for every beginning $1 of cash flow.
An equation determining aggregate output as a function of aggregate inputs such as labor and capital.
The pool factor implied by the scheduled amortization assuming no prepayemts.
Present value of $1 paid for each of t periods.
Present value of an annuity of $1 per period.
Rules set by the Chicago Board of Trade for determining the invoice price of each
a process costing document that
any item (such as quality, customer
Present value of $1 received at a stated future date.
Present value of a $1 future payment.
an estimate of the number
an approximation of the number of whole units of output that could have been
A financial institution that buys a firm's accounts receivables and collects the debt.
An agent who buys and sells goods on behalf of others for a commission.
A statistical procedure that seeks to explain a certain phenomenon, such as the return on a
A way of decomposing the factors that influence a security's rate of return into common and
A well-diversified portfolio constructed to have a beta of 1.0 on one factor and a beta of
Sale of a firm's accounts receivable to a financial institution known as a factor.
The sale of accounts receivable to a third party, with the third party bearing
The discounting, or sale at a discount, of receivables on a nonrecourse, notification
Type of financial service whereby a firm sells or transfers title to its accounts receivable to a factoring company, which then acts as principal, not as agent.
All the costs incurred during the manufacturing process, minus the
Numbers found in compound interest and annuity tables. Usually called the FVIF or PVIF.
The technique of stripping all non-value-added activities from
The production resource that, as a result of scarce resources, limits the production of goods
factoring arrangement that provides collection and insurance of accounts receivable.
A version of the capital asset pricing model derived by Merton that includes extramarket
Net benefit to leverage factor
A linear approximation of a factor, T*, that enables one to operationalize the
A general term referring to period costs, such as selling, administration and financial expenses.
factoring arrangement that provides collection, insurance, and finance for accounts receivable.
A special case of the arbitrage pricing theory that is derived from the one-factor model by
The outstanding principal balance divided by the original principal balance with the result
PPF (periodic perpetuity factor)
a generalization formula invented by Abrams that is the present value of regular but noncontiguous cash flows that have constant growth to perpetuity.
Present value factor
factor used to calculate an estimate of the present value of an amount to be received in
Process flow production
A production configuration in which products are continually
An agreement by the loan purchaser to allow the monthly loan quota to be
A general term referring to indirect costs.
Production payment financing
A method of nonrecourse asset-based financing in which a specified
Production yield variance
The difference between the actual and budgeted proportions
The pool factor as reported by the bond buyer for a given amortization period.
An anticipated loss percentage included in the bill of material and
The expected loss of some proportion of an item during the
Single factor model
A model of security returns that acknowledges only one common factor.
Black's zero-beta version of the capital asset pricing model.
UNITS OF PRODUCTION
A depreciation method that relates a machine’s depreciation to the number of units it makes each
an increase in units or volume caused by the addition
Income payments to factors of production are spent to buy output. The receipts from these sales are used to pay factors of production, creating a circular flow of income.
flexible manufacturing system (FMS)
a production system in which a single factory manufactures numerous variations
any factory or production cost that is indirect to
This is a key factor in the profit model of a business. Product
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