Foregone earnings are the earnings that a company would have generated if it had not made a particular decision. This term is often used in the context of capital investment decisions, where a company must choose between different investment options. The option with the highest expected return is said to have the greatest foregone earnings. … Read more
Wash trading is a type of trading that occurs when a trader buys and sells a security for the purpose of creating the appearance of activity in the market. Wash trades are generally considered to be a form of market manipulation, as they can be used to artificially inflate the price of a security or … Read more
The salvage value definition is the value of an asset at the end of its useful life. The salvage value is also known as the scrap value or residual value. The salvage value definition is important for businesses because it is used to calculate the depreciation of an asset. The salvage value definition is also … Read more
In a world where consumers are bombarded with marketing messages from all sides, it’s more important than ever for companies to differentiate their products and services. One way to do this is by offering an augmented product. An augmented product is a product or service that has been enhanced with additional features or benefits that … Read more
A brand extension is when a company uses a existing brand name to launch a new product. The new product can be related or unrelated to the company’s existing product line. Brand extension can be a cost-effective way to enter a new market or product category because the company can leverage the equity of its … Read more
A life-cycle fund is a type of mutual fund that aims to provide investors with a diversified portfolio that is appropriate for a specific stage in their life. The fund’s asset allocation is typically rebalanced over time to become more conservative as the investor approaches retirement. A life-cycle fund is a type of mutual fund … Read more
The Long Tail: What It Is and How to Use It in Business Does Amazon use long tail strategy? Yes, Amazon does use a long-tail strategy. This strategy is beneficial for Amazon because it allows them to sell a large number of items that may not be in high demand. By catering to niche markets, … Read more
Showrooming is a term used to describe the practice of shoppers visiting a brick-and-mortar store to examine merchandise before subsequently purchasing it online, typically at a lower price. In recent years, the prevalence of showrooming has increased as technology has advanced and shoppers have become more comfortable making purchases online. There are a number of … Read more
The term “bad bank” is used to describe a financial institution that is in trouble or is not doing well. This can be due to a variety of reasons, such as bad loans, mismanagement, or a weak economy. When a bank is in trouble, it is said to be “troubled” or “distressed.” There are a … Read more
The Q ratio is a measure of the market value of a company’s assets relative to the replacement cost of those assets. The ratio is also known as Tobin’s Q. The Q ratio is named after James Tobin, a Nobel Prize-winning economist who developed the measure in 1969. Tobin’s motivation for creating the ratio was … Read more
