An agency problem is a situation where one party (the “agent”) is delegated to act on behalf of another party (the “principal”). The agent is typically supposed to act in the best interests of the principal, but there is a potential for conflict of interest, because the agent also has his or her own interests … Read more
Full costing, also known as absorption costing, is a method of product costing that includes all manufacturing costs, both variable and fixed, in the cost of a product. This method is used in accounting and financial reporting. In full costing, all manufacturing costs incurred in making a product are assigned to that product. This includes … Read more
B2B: What It Is and How It’s Used What are the key technologies for B2B? There are a few key technologies for B2B, which include: – Customer Relationship Management (CRM) – Enterprise Resource Planning (ERP) – Business Intelligence (BI) CRM is a must for any business that wants to manage their customer relationships effectively. ERP … Read more
Cash flow financing is the process of using a company’s current cash flow to finance its operations. This can be done by either taking out a loan or by issuing new equity. Cash flow financing can be a good option for companies that have difficulty obtaining traditional financing, such as loans from banks. However, it … Read more
Outlay cost is the total cost incurred by a company to set up and run a project. It includes the cost of land, buildings, machinery, equipment, and any other resources required to get the project up and running. Outlay cost also includes the cost of any financing required to fund the project. What are the … Read more
A commercial mortgage-backed security is a type of mortgage-backed security that is backed by a commercial mortgage loan. Commercial mortgage-backed securities are divided into two main categories: whole loans and participation certificates. Whole loans are the most common type of CMBS and are typically securitized by conduit lenders. Participation certificates are a less common type … Read more
Compound probability is the probability that two or more events will occur in succession. For example, the probability of flipping a coin and getting heads is 1/2. The probability of flipping the coin twice and getting heads both times is 1/4. What is compound experiment in probability? In finance, a compound experiment is an experiment … Read more
An offering memorandum is a document that is provided to potential investors in a company or other entity. The memorandum outlines the terms of the investment, including the risks and rewards associated with it. It is important for potential investors to read and understand an offering memorandum before making any decision to invest. What is … Read more
Capital outflow refers to the increase in the value of a country’s currency resulting from the purchase of foreign assets. A country’s currency will appreciate (strengthen) if the demand for that currency is greater than the supply. When a country’s currency appreciates, the price of imported goods will decrease and the price of exported goods … Read more
How to Determine What Makes a Company Profitable using Activity-Based Management How does ABC system support corporate strategy? The ABC system is a tool that can be used to support the implementation of a corporate strategy. It can help managers to identify and track the costs associated with different activities, and to allocate resources accordingly. … Read more
