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8 Cards in this Set

  • Front
  • Back
only the original principle, or amount of money, earns interest over the life of the transaction
Simple interest
each time interest is paid, it is added to or compounded into the principle and thereafter also earns interest
Compound interest
a procedure for evaluating the effects of a farm manager's investment choices on a business 's profitability, risk, and liquidity is developed
Capital Budgeting
the average profits generated each year by an investment as a percent of either the orginal investment or the average investment over the investment's expected life
Simple rate of return
Method of investment analysis that estimates the length of time required for an investment to pay itself out or to recover the initial outlay of funds
The payback period
Uses the discounting formulas for a nonuniform or a uniform seris of payments to value the projected cash flows for each investment alternative at one point in time
net Present Value
An increase in the general level of prices for all goods and services in an economy
Interest rate per convernsion period
actuarial interest rae