What is Trade acceptance? Contractual agreement connected to a sight draft or time draft is considered as an acceptance that is utilized for the payment of dues within specified date. If a party has to pay for the draft then it is necessary to write an acceptance. It can be referred as “accepted” also. Signature… Read More »
Systematic Risk vs Unsystematic Risk Risk Analysis in Capital Budgeting Diverse ranges of risks are present in the process of investment. In case the capital is lost completely then you may have come across at high amount of risk. To eliminate the risk from the process of investment, you must go with an investment risk… Read More »
After-Tax Cost of Debt There is a part in the WACC formula – r (D) × (1 – t) that stands for after-tax cost of debt. The debt holders must earn this after-tax rate of return till the debt reaches to maturity. The cost of debt formula of a company should be based on the… Read More »
Cost of Equity The cost of equity is the rate of return required on the common stock of a company. This minimum rate of return is essential for the company to earn so that it prevents its common stocks price from falling. There are several models such as capital asset pricing model (CAPM) and dividend discount… Read More »
Weighted Average Cost of Capital Weighted average cost of capital Weighted average cost of capital (WACC) means to the average amount of minimum rate of return after paying the tax that a company must bring home for its all security holders including debt holders, common stockholders, and preferred stock holders. How to Calculate WACC? The… Read More »
What is Goodwill? Goodwill of a company is considered as an intangible asset that reveals the reputation, customer connection and other relevant factors of the business. Goodwill represents the value of a business firm’s status. This value is not countable in the account book, but it can be realized if the business is ever sold… Read More »
Difference between Sunk Cost and opportunity Cost Basically, sunk cost is money that has been spent already. On the other hand, opportunity cost is certain amount of money from which you are not able to get returns. Due to investment of capital inappropriate manner, return is not received. Sunk Cost Example If 1000 shares are… Read More »
Sunk Cost Vs Opportunity Cost Due to confusion in finance related issues, you can be stuck at one point for extended amount of time. It is certainly not a good thing. Difficulty is often faced in order to move forward. Therefore, few factors must be looked at before taking a decision on the occasion. According… Read More »
If exporter will have to deal with a new importer which payment method would he prefer and why? In cases where exporters are dealing with importer very first time,
Consignment vs Open Account payment Method In Case of Trusted Importer which payment method would you choose from consignment and open account and why? In case of trusted importer, I would prefer to choose Open Account payment method rather consignment for following reasons: