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8 Cards in this Set
- Front
- Back
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only the original principle, or amount of money, earns interest over the life of the transaction
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Simple interest
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each time interest is paid, it is added to or compounded into the principle and thereafter also earns interest
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Compound interest
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a procedure for evaluating the effects of a farm manager's investment choices on a business 's profitability, risk, and liquidity is developed
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Capital Budgeting
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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
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Simple rate of return
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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
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The payback period
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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
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net Present Value
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An increase in the general level of prices for all goods and services in an economy
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Inflation
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Interest rate per convernsion period
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actuarial interest rae
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