What are Avoidable and Unavoidable Costs?
In business and financial planning, knowing avoidable and unavoidable costs is critical to budgeting, cost control, and profitability analysis. Avoidable costs are those that a business can avoid by making certain business decisions, like stopping a product line or contracting out services. Unavoidable costs, on the other hand, are fixed costs that a business has […]
What is the Time Value of Money?
The Time Value of Money (TVM) is a fundamental principle in finance that states a dollar today is worth more than a dollar tomorrow. This is because money has the potential to grow over time when invested in a variety of opportunities. The TVM concept can be used to compare investments of different sizes and […]
What is a Bond? Why are they issued?
A bond is a financial instrument representing a loan by an investor to a borrower. The borrower may be a corporation, government, or any other entity. When you purchase a bond, you are lending money to the issuer, and he/she undertakes to repay you the amount of principal (the initial amount of the loan) on […]
What is the discounted cash flow technique?
The discounted cash flow technique is a financial forecasting method to determine how much money they will have leftover after investing in a project. The DCF method is based on the principle that a dollar today is worth more than a dollar in the future because a dollar today can be invested and earn interest. […]
What are Treasury Bills? | Duration of Issue
A Treasury bill, also known as a T-bill, is a short-term debt obligation issued by the U.S. Department of the Treasury. T-bills are considered to be one of the safest investments available, as they are backed by the full faith and credit of the U.S. government. T-bills are typically sold in denominations of $1,000 and […]
Markowitz Model of Risk-Return Optimization | Assumptions
Markowitz model is an optimal financial investment strategy to maximize the expected return for an investor while maintaining a desired level of risk. The Markowitz model of risk-return optimisation is a portfolio selection model that derives a set of weights for an investment portfolio that minimises the total variance of returns, subject to an initial […]
Spa Equipment Leasing as a Financial Business Solution
The beauty salon industry is on the rise as many individuals prefer to visit these places regularly to maintain their hairstyles, hair colouring, nails, etc. Modern beauty spas are laced with advanced technology such as machines to use for manicures and pedicures, shampooing and hair massaging, shaving, and much more. Due to the emerging needs […]
Net Present Value (NPV) Calculation With Example
The NPV method is based on the time value of money principle, which states that money is worth more today than it will be in the future. This is because money can earn interest, and the longer you have to wait for the money, the less you will get in return. The Net Present Value […]
Trend Analysis – Meaning and Example
Trend analysis is the process of analyzing the financial statements by the computing trend of a series of information using certain techniques. With the help of the trend analysis tool, we determine the directions upward or downward and compute the percentage relationship that each statement item bears to the same item in the base year. […]
IGNOU ECO-14 Assignment 2019-20 [Unsolved]
ECO – 14: Accountancy – II 1. What are the three systems of maintaining the accounts of a dependent branch and describe how is profit ascertained under each system? Explain how a branch stock account helps in keeping effective control over the branch stock. (20) 2. Jalani Distributors sold three light commercial vans to Jain […]