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Business Finance > REVIEWER 🤬 > Flashcards

REVIEWER 🤬 Flashcards

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1
Q

financial institution that accept deposits or offer loans

A

banks

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2
Q

offers bank-like services but cannot accept deposits due to absence of banking license

A

non-bank institution

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3
Q

offer transfer of risk transactions, cover the loss of the business

A

insurance companies

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4
Q

industry of buying and selling currencies

A

currency exchange

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5
Q

lending companies that offer small credits

A

microloan organization

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6
Q

institution that offer quick cash loans “sanla”

A

pawnshop

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7
Q

can be used in different purposes and whether those funds are used for short/long term

A

business loans in banks

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8
Q

provide loans but have lighter bank requirements, may offer flexible amount to be loan

A

business loans in non banking institution

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9
Q

details of personal data, income sources and credibility

A

application form

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10
Q

presented to support credibility of the entity

A

financial statements

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11
Q

client record of bank transactions

A

bank statements

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12
Q

overall legality of the business organization

A

certificate of business registration

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13
Q

presented in business proposal form

A

company profile

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14
Q

land title, tax declaration, vicinity map

A

collateral documents

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15
Q

offered submitted to and held by a custodian

A

credit information

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16
Q

determine the credit standing of the applicant

A

credit investigation

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17
Q

important in planning to forecast the outcome of the organization in future periods

A

projected financial statement

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18
Q

it is a concept that money you have now is worth more than the identical sum in the future

A

time value of money

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19
Q

it is the original amount borrowed

A

present value

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20
Q

it is the principal plus the total interest earned over a stated period

A

future value

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21
Q

it is the amount of money paid for the use of borrowed money

A

interest

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22
Q

it is computed based on the principal amount (original) and based on the annual time

A

simple interest

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23
Q

simple interest formula

A

I = Prt

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24
Q

it is an interest earned is added to the principal and the new principal draws interest

A

compound interest

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25
Q

formula of compound interest

A

FV = P (I+r) ^t

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26
Q

number of times an interest is computed on a certain principal in one year

A

compounding frequency

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27
Q

it is the sum of money borrowed that is expected to be paid back with interest

A

loan

28
Q

paying the debt with regular payments

A

amortization

29
Q

it is an example of an amortizing loan that requires the borrow to pay

A

housing loan

30
Q

form of loan that can be traded in through the Philippine Dealing and Exchange (PDEX) system

A

bond

31
Q

it is a series of payments required for a specific number of periods

A

annuity

32
Q

payments are due at the beginning of each payment perior

A

annuity due

33
Q

payment appears at the end of each period

A

ordinary annuity

34
Q

it is a process that a business uses in evaluating and selecting major projects or investment

A

capital budgeting

35
Q

it is a long term investment

A

capital expenditures

36
Q

all levels within the organization are encouraged to make suggestions for capital expenditures

A

investment proposal

37
Q

the financial personnels review and analyze the benefits and costs that may be derived from the proposal

A

review and analysis of the proposal

38
Q

these are projects that do not compete with other projects

A

independent projects

39
Q

these are the projects that compete with other projects, the approval of the one eliminate the other project

A

mutually exclusive projects

40
Q

the business with _______ will choose a project with the best opportunities

A

capital rationing

41
Q

if the business has _______ it will accept all the projects that pass the risk return criteria

A

unlimited funds

42
Q

net cash inflows one expects to get when the business/project had already started

A

cash returns

43
Q

evaluates a project by measuring the time it will take to recover the initial investment

A

payback method

44
Q

when cash returns are ______, the payback period is computed by adding the cash returns until the total is equal to the investment

A

uneven cash returns

45
Q

it is the difference between the present value of cash inflows and the net present value of cash outflows over a period

A

net present value

46
Q

it is the most used technique in capital budgeting where it was defined as the discount rate that makes the net present value of an investment equals to zero

A

internal rate return (IRR)

47
Q

it is efficient and effective way to use personal or business funds

A

investing

48
Q

it can be considered as funds that can either multiply or incure a loss

A

investment

49
Q

uncertainties or chances that the outcomes of investments are different from what is expected

A

investment risk

50
Q

uncertainty due to economic development or factors that affect the market

A

market risk

51
Q

chance that an investor is unable to sell an investment due to change in price

A

liquidity risk

52
Q

concentration of loss that can be incurred due to lack of diversification

A

concentration risk

53
Q

risk that money investment in a government bond may be uncollectible

A

credit risk

54
Q

risk of loss from shifting from one investment to another

A

reinvestment risk

55
Q

risk that an investment may not be able to sustain to purchasing power

A

inflation risk

56
Q

risk that an investment may be stepped or pulled out due to unforeseen events

A

horizon risk

57
Q

a person will live too long and may outline his/her investments

A

longevity risk

58
Q

individual market risks that may affect investment from different countries

A

foreign investment risk

59
Q

expected profits to receive from an investment

A

investment returns

60
Q

an investment will yield a higher return only if the investor accepts a higher risk or possibility of losses

A

risk return trade off

61
Q

primarily driven by the availability of resources while balancing the advantages and disadvantages of investment opportunities

A

risk tolerance

62
Q

characteristics of an investor whose willingness in accepting risk is very low

A

conservative risk tolerance

63
Q

an investor is willing to put average resources and accept some risks

A

moderate risk tolerance

64
Q

investor is willing to put more resources, accept maximum risks on a high quality investment

A

aggressive risk tolerance

65
Q

planning of investment opportunities based on the risk tolerance of an investor

A

portfolio management

66
Q

investors has stagnant or excess of resources, they engage in different investing activities to gain profits

A

investment diversification

Business Finance (3 decks)

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