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Financial Terms | |
Foreign direct investment (FDI) |
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Definition of Foreign direct investment (FDI)Foreign direct investment (FDI)The acquisition abroad of physical assets such as plant and equipment, with
Related Terms:Business Expansion InvestmentThe use of capital to create more money through the addition of fixed assets or through income producing vehicles. capital investment analysisRefers to various techniques and procedures Capital InvestmentsMoney used to purchase fixed assets for a business, such as land, buildings, or machinery. Also, money invested in a business on the understanding that it will be used to purchase permanent assets rather than to cover day-to-day operating expenses. Controlled foreign corporation (CFC)A foreign corporation whose voting stock is more than 50% owned direct costa cost that is distinctly traceable to a particular cost object Direct costA cost that can be clearly associated with specific activities or products. direct costingsee variable costing ![]() Direct costingA costing methodology that only assigns direct labor and material costs Direct costsCosts that are readily traceable to particular products or services. Direct DepositThe direct transfer of payroll funds from the company bank account direct depositA system where funds are electronically credited to your account by a financial institution or a payroll service. For example, you can arrange with your employer to have your pay cheques automatically deposited into your no fee bank account. Direct estimate methodA method of cash budgeting based on detailed estimates of cash receipts and cash direct laborthe time spent by individuals who work specifically Direct laborLabor that is specifically incurred to create a product. Direct leaseLease in which the lessor purchases new equipment from the manufacturer and leases it to the direct materiala readily identifiable part of a product; the cost of such a part ![]() Direct materials costThe cost of all materials used in a cost object, such as finished goods. Direct materials mix varianceThe variance between the budgeted and actual mixes of Direct methodA method of preparing the operating section of the Statement of Cash Flows that uses the company’s actual cash inflows and cash outflows. direct methoda service department cost allocation approach Direct-Method FormatA format for the operating section of the cash-flow statement that reports actual cash receipts and cash disbursements from operating activities. Direct paperCommercial paper sold directly by the issuer to investors. Direct placementSelling a new issue not by offering it for sale publicly, but by placing it with one of several Direct quoteFor foreign exchange, the number of U.S. dollars needed to buy one unit of a foreign currency. Direct-Response AdvertisingAdvertising designed to elicit sales to customers who can be Direct search marketBuyers and sellers seek each other directly and transact directly. Direct stock-purchase programsThe purchase by investors of securities directly from the issuer. ![]() Direct write-off methodA method of adjusting accounts receivable to the amount that is expected to be collected by eliminating the account balances of specific nonpaying customers. DirectorA member of a company’s Board of directors. Dividend reinvestment plan (DRP)Automatic reinvestment of shareholder dividends in more shares of a Equity investmentThrough equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock. Expected return on investmentThe return one can expect to earn on an investment. See: capital asset FDICFederal Deposit Insurance Corporation. Federal Deposit Insurance Corporation (FDIC)A federal institution that insures bank deposits. Foreign banking marketThat portion of domestic bank loans supplied to foreigners for use abroad. Foreign bondA bond issued on the domestic capital market of anther company. Foreign bond marketThat portion of the domestic bond market that represents issues floated by foreign Foreign Corrupt Practices Act (FCPA)a law passed by U.S. Congress in 1977 that makes it illegal for a U.S. company to engage in various “questionable” foreign payments and Foreign currencyforeign money. Foreign currency optionAn option that conveys the right to buy or sell a specified amount of foreign Foreign currency translationThe process of restating foreign currency accounts of subsidiaries into the Foreign equity marketThat portion of the domestic equity market that represents issues floated by foreign companies. Foreign exchangeCurrency from another country. Foreign ExchangeThe currency of a foreign country. Foreign exchange controlsVarious forms of controls imposed by a government on the purchase/sale of Foreign exchange dealerA firm or individual that buys foreign exchange from one party and then sells it to Foreign Exchange MarketA worldwide market in which one country's currency is bought or sold in exchange for another country's currency. Foreign Exchange ReservesA fund containing the central bank's holdings of foreign currency or claims thereon. Foreign exchange riskThe risk that a long or short position in a foreign currency might have to be closed out Foreign exchange swapAn agreement to exchange stipulated amounts of one currency for another currency Foreign marketPart of a nation's internal market, representing the mechanisms for issuing and trading Foreign market betaA measure of foreign market risk that is derived from the capital asset pricing model. Foreign Sales Corporation (FSC)A special type of corporation created by the Tax Reform Act of 1984 that Foreign tax creditHome country credit against domestic income tax for foreign taxes paid on foreign Future investment opportunitiesThe options to identify additional, more valuable investment opportunities guaranteed investment certificate (GIC)A GIC is an investment that gives you a guaranteed rate of return over a fixed period of time, usually between 30 days and 5 years. GICs are available from banks, trust companies, and other financial institutions. Guaranteed investment contract (GIC)A pure investment product in which a life company agrees, for a indirect costa cost that cannot be traced explicitly to a particular Indirect costA cost that is not directly associated with a single activity or event. Such Indirect costsCosts that are necessary to produce a product/service but are not readily traceable to particular products or services – see overhead. Indirect laborThe cost of any labor that supports the production process, but which is Indirect methodA method of preparing the operating section of the Statement of Cash Flows that does not use the company’s actual cash inflows and cash outflows, but instead arrives at the net cash flow by taking net income and adjusting it for noncash expenses and the changes from last year in the current assets and current liabilities. Indirect-Method FormatA format for the operating section of the cash-flow statement that Indirect quoteFor foreign exchange, the number of units of a foreign currency needed to buy one U.S.$. Indirect TaxesTaxes paid by consumers when they buy goods and services. A sales tax is an example. Interac® Direct PaymentInstead of paying with cash or a credit card, Interac direct Payment allows you to pay for your purchase with a debit card, such as your bank card. The amount of the purchase is electronically debited, or withdrawn, from your bank account (see debit card). InvestmentThe commitment of funds (capital) in anticipation of an increased Investment analystsRelated: financial analysts Investment bankFinancial intermediaries who perform a variety of services, including aiding in the sale of Investment BankerMiddleman between a corporation issuing new securities and the public. The middleman buys the securities issue outright and then resells it to customers. Also called an underwriter. investment centera responsibility center in which the manager Investment centreA division or unit of an organization that is responsible for achieving an adequate return on investment decisiona judgment about which assets will be Investment decisionsDecisions concerning the asset side of a firm's balance sheet, such as the decision to investment gradeBonds rated Baa or above by Moody’s or BBB or above by Standard & Poor’s. Investment grade bondsA bond that is assigned a rating in the top four categories by commercial credit Investment incomeThe revenue from a portfolio of invested assets. Investment managerAlso called a portfolio manager and money manager, the individual who manages a Investment product line (IPML)The line of required returns for investment projects as a function of beta Investment SpendingExpenditures on capital goods including new housing. Financial ''investments" and sales of existing assets are not included. Investment tax creditProportion of new capital investment that can be used to reduce a company's tax bill Investment Tax CreditA reduction in taxes offered to firms to induce them to increase investment spending. Investment trustA closed-end fund regulated by the investment Company Act of 1940. These funds have a Investment valueRelated:straight value. InvestmentsAs a discipline, the study of financial securities, such as stocks and bonds, from the investor's Legal investmentsinvestments that a regulated entity is permitted to make under the rules and regulations Mutually exclusive investment decisionsinvestment decisions in which the acceptance of a project Net investmentGross, or total, investment minus depreciation. Net Investmentinvestment spending minus depreciation. Net present value of future investmentsThe present value of the total sum of NPVs expected to result from Passive investment managementBuying a well-diversified portfolio to represent a broad-based market Passive investment strategySee: passive management. postinvestment auditthe process of gathering information pre-authorized direct depositA system where funds are electronically credited to your account by a financial institution or a payroll service. qualified investments (Canada)Qualified investments is the term used for investments that can be held in an RSP. These investments generally include: Regular Investment Plan (RIP)A plan under which you may make regular deposits of the same amount to your Mutual Funds account once a month, once every 2 weeks, or once a week. You can also make regular deposits up to four times a month on any dates you choose. reinvestment assumptionan assumption made about the rates of return that will be earned by intermediate cash flows from a capital project; NPV and PI assume reinvestment at the discount rate; IRR assumes reinvestment at the IRR Reinvestment rateThe rate at which an investor assumes interest payments made on a debt security can be Reinvestment riskThe risk that proceeds received in the future will have to be reinvested at a lower potential Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |