|standard overhead application rate|
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Main Page: financial, financial advisor, business, tax advisor, payroll, credit, finance, inventory,
Definition of standard overhead application rate
standard overhead application rate
a predetermined overhead rate used in a standard cost system; it can be a separate variable or fixed rate or a combined overhead rate
an estimated constant charge per unit of activity used to assign overhead cost to production or services of the period; it is calculated by dividing total budgeted annual overhead at a selected level of volume or activity by that selected measure of volume or activity; it is also the standard overhead application rate
the rate of return on investment that would be required by a prudent investor to invest in an asset with a specific level risk. Also, a rate of return used to convert a monetary sum, payable or receivable in the future, into present value.
Schedule of depreciation rates allowed for tax purposes.
Any depreciation method that produces larger deductions for depreciation in the
A strategy that uses available information and forecasting techniques to seek a
Publicly traded issues that may be collateralized by mortgages and MBSs.
Money after-tax rate of return minus the inflation rate.
The discount rate that reflects only the business risks of a project and abstracts from the
Swap in which the principal or national amount rises (falls) as interest rates
The periodic rate times the number of periods in a year. For example, a 5%
Arithmetic mean return.
Floating rate preferred stock, the dividend on which is adjusted every
The ratio of the average cash inflow to the amount invested.
Taxes as a fraction of income; total taxes divided by total taxable income.
A strategy in which the maturities of the securities included in the portfolio are concentrated
Base interest rate
Related: Benchmark interest rate.
Basic business strategies
Key strategies a firm intends to pursue in carrying out its business plan.
Benchmark interest rate
Also called the base interest rate, it is the minimum interest rate investors will
Break-even payment rate
The prepayment rate of a MBS coupon that will produce the same CFY as that of
Break-even tax rate
The tax rate at which a party to a prospective transaction is indifferent between entering
Broker loan rate
Related: Call money rate.
A strategy in which a portfolio is constructed so that the maturities of its securities are highly
A passive investment strategy with no active buying and selling of stocks from the
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
A strategy in which a put and with the same strike price and expiration are either both
Committee, AIMR Performance Presentation Standards Implementation Committee
The Association for Investment Management and Research (AIMR)'s Performance Presentation standards Implementation
A firm engaged in two or more unrelated businesses.
A merger involving two or more firms that are in unrelated businesses.
The acquisition of one firm by anther firm.
Debt obligations issued by corporations.
A legal document creating a corporation.
One of the three areas of the discipline of finance. It deals with the operation of the firm
Corporate financial management
The application of financial principals within a corporation to create and
Corporate financial planning
Financial planning conducted by a firm that encompasses preparation of both
Corporate processing float
The time that elapses between receipt of payment from a customer and the
Corporate tax view
The argument that double (corporate and individual) taxation of equity returns makes
Corporate taxable equivalent
rate of return required on a par bond to produce the same after-tax yield to
In bonds, notes or other fixed income securities, the stated percentage rate of interest, usually
Covered call writing strategy
A strategy that involves writing a call option on securities that the investor
Covered or hedge option strategies
Strategies that involve a position in an option as well as a position in the
The interest rate offered on an investment type insurance policy.
The exchange rate between two currencies expressed as the ratio of two foreign exchange rates
The return at which two alternative projects have the same net present value.
Current rate method
Under this currency translation method, all foreign currency balance-sheet and income
Refers to multi-period cash flow matching.
The interest rate that the Federal Reserve charges a bank to borrow funds when a bank is
The fixed or floating rate paid on preferred stock based on par value.
Dollar-weighted rate of return
Also called the internal rate of return, the interest rate that will make the
Effective annual interest rate
An annual measure of the time value of money that fully reflects the effects of
A measure of the time value of money that fully reflects the effects of compounding.
Equilibrium rate of interest
The interest rate that clears the market. Also called the market-clearing interest
The price of one country's currency expressed in another country's currency.
Exchange Rate Mechanism (ERM)
The methodology by which members of the EMS maintain their
Exchange rate risk
Also called currency risk, the risk of an investment's value changing because of currency
Federal funds rate
This is the interest rate that banks with excess reserves at a Federal Reserve district bank
A country's decision to tie the value of its currency to another country's currency, gold
A loan on which the rate paid by the borrower is fixed for the life of the loan.
In an interest rate swap the counterparty who pays a fixed rate, usually in exchange for a
Floating exchange rate
A country's decision to allow its currency value to freely change. The currency is not
A guaranteed investment contract where the credit rating is tied to some variable
Floating-rate note (FRN)
Note whose interest payment varies with short-term interest rates.
In an interest rate swap, the counterparty who pays a rate based on a reference rate,
Preferred stock paying dividends that vary with short-term interest rates.
Forward exchange rate
Exchange rate fixed today for exchanging currency at some future date.
Forward interest rate
Interest rate fixed today on a loan to be made at some future date.
A projection of future interest rates calculated from either the spot rates or the yield curve.
Forward rate agreement (FRA)
Agreement to borrow or lend at a specified future date at an interest rate
Gold exchange standard
A system of fixing exchange rates adopted in the Bretton Woods agreement. It
An international monetary system in which currencies are defined in terms of their gold
Compound annual growth rate for the number of full fiscal years shown. If there is a negative
Historical exchange rate
An accounting term that refers to the exchange rate in effect when an asset or
The required return in capital budgeting.
A bond portfolio strategy whose goal is to eliminate the portfolio's risk against a
Implied repo rate
The rate that a seller of a futures contract can earn by buying an issue and then delivering
Import-substitution development strategy
A development strategy followed by many Latin American
Incremental internal rate of return
IRR on the incremental investment from choosing a large project
Interest rate agreement
An agreement whereby one party, for an upfront premium, agrees to compensate the
Interest rate cap
Also called an interest rate ceiling, an interest rate agreement in which payments are made
Interest rate ceiling
Related: interest rate cap.
Interest rate floor
An interest rate agreement in which payments are made when the reference rate falls
Interest rate on debt
The firm's cost of debt capital.
Interest rate parity theorem
Interest rate differential between two countries is equal to the difference
Interest rate risk
The risk that a security's value changes due to a change in interest rates. For example, a
Interest rate swap
A binding agreement between counterparties to exchange periodic interest payments on
Internal growth rate
Maximum rate a firm can expand without outside source of funding. Growth generated
Internal rate of return
Dollar-weighted rate of return. Discount rate at which net present value (NPV)
Inverse floating rate note
A variable rate security whose coupon rate increases as a benchmark interest rate declines.
A bond portfolio strategy in which the portfolio is constructed to have approximately equal
The payment per period stated in a lease contract.
Liability funding strategies
Investment strategies that select assets so that cash flows will equal or exceed
The payment per period stated in a lease contract.
Marginal tax rate
The tax rate that would have to be paid on any additional dollars of taxable income earned.
Market capitalization rate
Expected return on a security. The market-consensus estimate of the appropriate
Money rate of return
Annual money return as a percentage of asset value.
The interest rate on a mortgage loan.
Multiple rates of return
More than one rate of return from the same project that make the net present value
Naked option strategies
An unhedged strategy making exclusive use of one of the following: Long call
Nominal annual rate
An effective rate per period multiplied by the number of periods in a year.
Nominal exchange rate
The actual foreign exchange quotation in contrast to the real exchange rate that has
Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.