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21 Cards in this Set
- Front
- Back
Probability |
This is the percentage of chance that an event will occur |
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Unk-unks or unknown-unknown |
In finance, these are the things that can really wreak havoc in for costing |
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Havoc |
Means not sure or the sources of information is undetermine |
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Breakeven |
This is the point where we are not making money but we are also not losing money |
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Operating Leverage |
Sometimes happen in business. This pertains to the degree to which cost are fixed |
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Risk premium |
Describe an investor who invests in a common stocks and stands to earn more for accepting the higher risk |
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Capital budgeting |
Is a process of planning for capital expenditure or long term investments |
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Discounted cash flow DCF analysis |
Is a technique that translate cash flow extending from their future value into their present value |
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DCF model |
Is described as discounted cash flow because cash in the future is worth less than cash today |
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DCF analysis |
Is not suited to short term investment |
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Incremental cash flow |
Provides basis for comparing projects with different benefits |
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Sunk cost |
Is life history. There is nothing you can do to change it |
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Networking capital |
Is the difference between the company's short term assets and liabilities |
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Scenario analysis |
It is a process of analyzing possible future events by considering alternative possible outcome |
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Risk |
Refers to the chance that some unfavorable event will occur |
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Variance |
Is the average value of squared deviations from the mean |
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Standard deviation |
Is a statistical measure for of the variability of a probability distribution around its expected value |
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Diversification |
It means investing in more than one type of assets in order to reduce risk |
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Market risk |
Stem from the existence of economy wide forces that threaten all business |
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Capital asset pricing model CAPM |
It is a model based on the propositions that any stock has a required rate of return equal to the risk free rate of return + risk premium that reflects only the risk remaining of diversification |
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Comp. Capital structure |
Combination of debt and equity |