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Definition of Net investment
Gross, or total, investment minus depreciation.
investment spending minus depreciation.
The present value of the total sum of NPVs expected to result from
a ratio that compares the present value of net cash flows to the present value of the net investment
a method of allocating joint cost to joint products using a
The use of capital to create more money through the addition of fixed assets or through income producing vehicles.
Refers to various techniques and procedures
Money 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.
Automatic reinvestment of shareholder dividends in more shares of a
Through equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock.
An exchange arrangement formed in 1979 that involves the currencies
The return one can expect to earn on an investment. See: capital asset
Offsetting exposures in one currency with exposures in the same or another currency,
Total firm value minus total firm debt.
The acquisition abroad of physical assets such as plant and equipment, with
The options to identify additional, more valuable investment opportunities
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
International Monetary Fund
An organization founded in 1944 to oversee exchange arrangements of
International Monetary Fund (IMF)
Organization originally established to manage the postwar fixed exchange rate system.
International Monetary Market (IMM)
A division of the CME established in 1972 for trading financial
Internet business model
a model that involves
a mechanism for sharing information and delivering data from corporate databases to the local-area network (LAN) desktops
The commitment of funds (capital) in anticipation of an increased
Related: financial analysts
Financial intermediaries who perform a variety of services, including aiding in the sale of
Middleman 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.
a responsibility center in which the manager
A division or unit of an organization that is responsible for achieving an adequate return on
a judgment about which assets will be
Decisions concerning the asset side of a firm's balance sheet, such as the decision to
Bonds rated Baa or above by Moody’s or BBB or above by Standard & Poor’s.
Investment grade bonds
A bond that is assigned a rating in the top four categories by commercial credit
The revenue from a portfolio of invested assets.
Also 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
Expenditures on capital goods including new housing. Financial ''investments" and sales of existing assets are not included.
Investment tax credit
Proportion of new capital investment that can be used to reduce a company's tax bill
Investment Tax Credit
A reduction in taxes offered to firms to induce them to increase investment spending.
A closed-end fund regulated by the investment Company Act of 1940. These funds have a
As a discipline, the study of financial securities, such as stocks and bonds, from the investor's
investments that a regulated entity is permitted to make under the rules and regulations
School of economic thought stressing the importance of the money supply in the economy. Adherents believe that the economy is inherently stable, so that policy is best undertaken through adoption of a policy rule.
Proposal that the money supply be increased at a steady rate equal approximately to the real rate of growth of the economy. Contrast with discretionary policy.
Any measure of the economy's money supply.
See money base.
Gold held by governmental authorities as a financial asset.
Monetary / non-monetary method
Under this translation method, monetary items (e.g. cash, accounts
Actions taken by the Board of Governors of the Federal Reserve System to influence the
Actions taken by the central bank to change the supply of money and the interest rate and thereby affect economic activity.
Monetizing the Debt
See printing money.
Mutually exclusive investment decisions
investment decisions in which the acceptance of a project
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
The value of all the holdings of a mutual fund, less the fund's liabilities.
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 after Operations
Cash flow available for debt service—the payment of interest and principal on loans. Generally calculated as cash provided by operating activities before interest
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 cost of normal spoilage
the cost of spoiled work less the estimated disposal value of that work
Net Domestic Product
GDP minus depreciation.
Net errors and omissions
In balance of payments accounting, net errors and omissions record the statistical
Exports minus imports.
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.
Difference between payment float and availability float.
The company's total earnings, reflecting revenues adjusted for costs of doing business,
The profit a company makes after cost of goods sold, expenses, and taxes are subtracted from net sales.
The last line of the Income Statement; it represents the amount that the company earned during a specified period.
The excess of revenues over expenses, including the impact of income taxes.
net income (also called the bottom line, earnings, net earnings, and net
The current inventory balance, less allocated or reserved items.
A lease arrangement under which the lessee is responsible for all property taxes, maintenance
Net National Product
GNP minus depreciation.
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 amount of an employee’s wages payable after all tax and other deductions have been removed.
The period of time between the end of the discount period and the date payment is due.
Net present value
A discounted cash flow methodology that uses a required rate of
net present value method
a process that uses the discounted
Net present value (NPV)
The present value of the expected future cash flows minus the cost.
Net present value (NPV)
A discounted cash flow technique used for investment appraisal that calculates the present value of future cash flows and deducts the initial capital investment.
net present value (NPV)
Equals the present value (PV) of a capital investment
Net Present Value (NPV)
The present value of all future cash inflows minus the present value
net present value (NPV)
the difference between the present values of all cash inflows and outflows for an investment project
net present value (NPV)
Present value of cash flows minus initial investment.
Net Present Value (NPV) Method
A method of ranking investment proposals. NPV is equal to the present value of the future returns, discounted at the marginal cost of capital, minus the present value of the cost of the investment.
Net present value of growth opportunities
A model valuing a firm in which net present value of new
Net present value rule
An investment is worth making if it has a positive NPV. Projects with negative NPVs
See operating profit.
Net profit margin
net income divided by sales; the amount of each sales dollar left over after all expenses
Net Realizable Value
Selling price of an asset less expenses of bringing the asset into a saleable state and expenses of the sale.
net realizable value approach
a method of accounting for by-products or scrap that requires that the net realizable value of these products be treated as a reduction in the cost of the primary products; primary product cost may be reduced by decreasing either
net realizable value at split-off allocation
a method of allocating joint cost to joint products that uses, as the proration base, sales value at split-off minus all costs necessary
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