Finance

Definition: The Net Present Value (NPV) is a means of evaluating the actual long-term profitability of an investment or a project through the initial outflow, future cash flows and time value of money. Also known as the discounted cash flow method, it backs the capital budgeting decisions of a company. It is an effective means of forecasting the future outcome of a … [Read more...] about Net Present Value (NPV)

Definition: Tax holiday refers to the temporary period when the government reduces or provides complete relaxation on tax payable on a specific range of products, income or property. It generally lasts for a day, or two days or a week. Some of the most prominent kinds of taxes included under this holiday initiative are sales tax, property tax, income tax and GST (Goods and … [Read more...] about Tax Holiday

Definition: Decision tree analysis is a powerful decision-making tool which initiates a structured nonparametric approach for problem-solving. It facilitates the evaluation and comparison of the various options and their results, as shown in a decision tree. It helps to choose the most competitive alternative. It is a widely used technique for taking crucial decisions like … [Read more...] about Decision Tree Analysis

Definition: Corporate spinoff refers to the dissolution of a subsidiary business entity from its parent company to form a new though smaller independent organization. The subsidiary company's shares are majorly allotted to the existing shareholders', as per their holding (pro-rata basis) in the parent company. The new entity so formed has an individual identity and acquires … [Read more...] about Corporate Spinoff

Definition: A dividend policy can be defined as the dividend distribution guidelines provided by the board of directors of a company. It sets the parameter for delivering returns to the equity shareholders, on the capital invested by them in the business. While taking such decisions, the company has to maintain a proper balance between its debt and equity … [Read more...] about Dividend Policy

Definition: A break-even point is that position where a business entity can recover its cost through the revenue it generates from the sales. Here, we can say that the company is now able to meet its expenses through its sales revenue. Break-even analysis is the means to identify the effect of variation in sales volume on the cost, revenue and profitability of a project or a … [Read more...] about How to Calculate Break-Even Point?

Definition: Break-even analysis is a tool used by the business organizations to find out the minimum number of units it needs to sell or the amount of sales revenue it has to generate for meeting up the total cost incurred. It is the initial judgement on whether the project is viable or not. Break-even analysis is an essential tool for any business. All the initial decisions … [Read more...] about Break-Even Analysis

Definition: A financial market is a marketplace where trading or exchange of various financial instruments and assets takes place. The price of these assets is dependant on its demand and supply in the respective market. All the financial and economic activities in a country are dependent upon these markets Example The most common financial market is Real Estate … [Read more...] about Financial Market

Definition: Capital budgeting is the method of determining and estimating the potential of long-term investment options involving enormous capital expenditure. It is all about the company's strategic decision making, which acts as a milestone in the business. For Example; Let us now consider capital budgeting for buying a new printing machine by a publishing house. The … [Read more...] about Capital Budgeting