|net cost of normal spoilage
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Definition of net cost of normal spoilage
net cost of normal spoilage
the cost of spoiled work less the estimated disposal value of that work
a measure used in academic finance articles to measure the excess returns an investor would have received over a particular time period if he or she were invested in a particular stock.
Same as PV, but usually includes a subtraction for an initial cash outlay.
Part of the return that is not due to systematic influences (market wide influences). In
Schedule of depreciation rates allowed for tax purposes.
The argument that specifies that the various agency costs create a complex environment in
The incremental costs of having an agent make decisions for a principal.
Total costs, explicit and implicit.
A firm's required payout to the bondholders and to the stockholders expressed as a
The argument that expected indirect and direct bankruptcy costs offset the other
costs that increase with increases in the level of investment in current assets.
Arrangement whereby the shareholders of a project receive output free of
The required return for a capital budgeting project.
Related: net financing cost
Interest rate associated with borrowing money.
A lease's internal rate of return.
Cost of limited partner capital
The discount rate that equates the after-tax inflows with outflows for capital
The net present value of an investment divided by the investment's initial cost. Also called
Cumulative abnormal return (CAR)
Sum of the differences between the expected return on a stock and the
Equivalent annual cost
The equivalent cost per year of owning an asset over its entire life.
European Monetary System (EMS)
An exchange arrangement formed in 1979 that involves the currencies
The difference between the execution price of a security and the price that would have
Offsetting exposures in one currency with exposures in the same or another currency,
Financial distress costs
Legal and administrative costs of liquidation or reorganization. Also includes
Firm's net value of debt
Total firm value minus total firm debt.
A cost that is fixed in total for a given period of time and for given production levels.
costs, both implied and direct, associated with a transaction. Such costs include time, effort,
Incremental costs and benefits
costs and benefits that would occur if a particular course of action were
Transaction costs that include the assessment of the investment merits of a financial asset.
International Monetary Fund
An organization founded in 1944 to oversee exchange arrangements of
International Monetary Market (IMM)
A division of the CME established in 1972 for trading financial
A distribution where the logarithm of the variable follows a normal distribution.
Market impact costs
Also called price impact costs, the result of a bid/ask spread and a dealer's price concession.
Market timing costs
costs that arise from price movement of the stock during the time of the transaction
Gold held by governmental authorities as a financial asset.
Actions taken by the Board of Governors of the Federal Reserve System to influence the
Monetary / non-monetary method
Under this translation method, monetary items (e.g. cash, accounts
Net adjusted present value
The adjusted present value minus the initial cost of an investment.
Net advantage of refunding
The net present value of the savings from a refunding.
Net advantage to leasing
The net present value of entering into a lease financing arrangement rather than
Net advantage to merging
The difference in total post- and pre-merger market value minus the cost of the merger.
Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share
The difference between total assets on the one hand and current liabilities and noncapitalized longterm
Net benefit to leverage factor
A linear approximation of a factor, T*, that enables one to operationalize the
Net book value
The current book value of an asset or liability; that is, its original book value net of any
Net cash balance
Beginning cash balance plus cash receipts minus cash disbursements.
This is the difference between a day's last trade and the previous day's last trade.
Net errors and omissions
In balance of payments accounting, net errors and omissions record the statistical
Net financing cost
Also called the cost of carry or, simply, carry, the difference between the cost of financing
Sum of disbursement float and collection float.
The company's total earnings, reflecting revenues adjusted for costs of doing business,
Gross, or total, investment minus depreciation.
A lease arrangement under which the lessee is responsible for all property taxes, maintenance
Net operating losses
Losses that a firm can take advantage of to reduce taxes.
Net operating margin
The ratio of net operating income to net sales.
The period of time between the end of the discount period and the date payment is due.
Net present value (NPV)
The present value of the expected future cash flows minus the cost.
Net present value of growth opportunities
A model valuing a firm in which net present value of new
Net present value of future investments
The present value of the total sum of NPVs expected to result from
Net present value rule
An investment is worth making if it has a positive NPV. Projects with negative NPVs
Net profit margin
net income divided by sales; the amount of each sales dollar left over after all expenses
Net salvage value
The after-tax net cash flow for terminating the project.
Net working capital
Current assets minus current liabilities. Often simply referred to as working capital.
Common stockholders' equity which consists of common stock, surplus, and retained earnings.
Reducing transfers of funds between subsidiaries or separate companies to a net amount.
To get or bring in as a net; to clear as profit.
Normal annuity form
The manner in which retirement benefits are paid out.
Normal backwardation theory
Holds that the futures price will be bid down to a level below the expected
Related: standardized value
Normal probability distribution
A probability distribution for a continuous random variable that is forms a
A customized benchmark that includes all the securities from which a manager normally
Normal random variable
A random variable that has a normal probability distribution.
The practice of making a charge in the income account equivalent to the tax savings
Opportunity cost of capital
Expected return that is foregone by investing in a project rather than in
The difference in the performance of an actual investment and a desired investment
Reducing fund transfers between affiliates to only a netted amount. netting can be done on
Price impact costs
Related: market impact costs
cost to replace a firm's assets.
Round-trip transactions costs
costs of completing a transaction, including commissions, market impact
The minimum available return that will trigger an immunization strategy in a contingent
costs associated with locating a counterparty to a trade, including explicit costs (such as
costs that fall with increases in the level of investment in current assets.
SIMEX (Singapore International Monetary Exchange)
A leading futures and options exchange in Singapore.
Standardized normal distribution
A normal distribution with a mean of 0 and a standard deviation of 1.
costs that have been incurred and cannot be reversed.
costs of buying and selling marketable securities and borrowing. Trading costs include
The time, effort, and money necessary, including such things as commission fees and the
True interest cost
For a security such as commercial paper that is sold on a discount basis, the coupon rate
A cost that is directly proportional to the volume of output produced. When production is zero,
Weighted average cost of capital
Expected return on a portfolio of all the firm's securities. Used as a hurdle
An assetâ€™s purchase price, plus costs associated with the purchase, like installation fees, taxes, etc.
Cost of goods sold
The cost of merchandise that a company sold this year. For manufacturing companies, the cost of raw
MACRS (Modified Accelerated Cost Recovery System)
A depreciation method created by the IRS under the Tax Reform Act of 1986. Companies must use it to depreciate all plant and equipment assets installed after December 31, 1986 (for tax purposes).
The profit a company makes after cost of goods sold, expenses, and taxes are subtracted from net sales.
NET SALES (revenue)
The amount sold after customersâ€™ returns, sales discounts, and other allowances are taken away from
RATIO OF NET INCOME TO NET SALES
A ratio that shows how much net income (profit) a company made on each dollar of net sales. Hereâ€™s the formula:
RATIO OF NET SALES TO NET INCOME
A ratio that shows how much a company had to collect in net sales to make a dollar of profit. Figure it this way:
A method of costing in which all fixed and variable production costs are charged to products or services using an allocation base.
A method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers.
costs that are identifiable with and able to be influenced by decisions made at the business
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