Definition of perpetuity Annual constant cash flows for an indefinite period of time. Formula – Present value of perpetuity Explanation…

Definition of annuity Annual constant cashflows for a definite period of time. Formula – Present value of annuity Explanation Suppose…

Businesses invest the surplus amounts to earn a profit on it. The simplest investment is putting the surplus in the…

Definition – Payback period Payback is the period required by the project to recover its invested funds back in the…

Definition It is the discount rate of the project on which the Net Present Value (NPV) of the project is…

Definition – Time Value of Money (TVM) A sum of money in the hand has greater value than the same…

Definition It is a forecasting method used to forecast semi-variable costs. High-low method is used to break the semi-variable costs…

Definition What is capital budgeting? Capital budgeting is an estimation of capital expenditure that covers several years. It is a…

Definition An estimation of cash receipts and payments for a specified period is called cash budget. It is usually prepared…

Definition An estimation of manufacturing overheads expected in the coming period is called manufacturing overhead budget. We have learned that…