Capital Investments
True or False: You can separate a business's capital into Maintenance Capital and Growth Capital.
True
True or False: I.R.R stand for Internal Rate of Royalties.
False
Internal Rate of Return
What does FCF stand for?
Free Cash Flow
Which is the best type of negotiator, Assertive, Aggressive or Passive?
Assertive
True or False: The U.S. government just voted to raise their debt ceiling?
True
What equation do we use to find out if investing in option A, or option B, is more money for us in 5 years?
Future Value
What is an I.P.O.?
Initial Public Offering is putting a company on the stock market for the first time. From private to public.
Does it usually cost more to raise debt capital or equity capital?
Equity capital because the owners of the equity are taking a higher risk than the company's debtors.
Would an aggressive negotiator make the other person feel defensive or guilty?
Defensive
Why is cost control important?
Shows inefficiencies
Helps with budget decisions
Helps with your competitive advantage.
What equation do we use to find an investment's value in 'today money".
Present Value
What are Royalty payments?
Franchising first-time fee and then also monthly fees for using a brand.
Price of a Stock * How many stocks in total =
Describe Yielding to someone in a negotiation.
I means to concede a point that is not vital to you but important to the other negotiating party.
What equation would I use if I wanted to minimize my holding and ordering costs?
E.O.Q.
Economic Order Quantity
What is inflation in your own words?
Inflation is a gradual decrease in our money's purchasing power over time. (printing huge amounts of money).
What is the difference between a Merger and an Acquisition?
Merger is combining two companies while an acquisition is buying another company.
What is a company's W.A.C.C?
It is a percentage of blended cost to raise new capital. It is raised through debt and equity financing sources.
What is Trial Closing?
Giving two possibilities that both help your situation.
Why do we use NPV to value a company or investment?
Because it takes multiple years of income and puts the total of them in "today" money so we can see the "today" value of that financial move.
What is one source of debt financing and one source of equity financing.
Debt Equity
Loans Stocks
Bonds Retained earnings
Line of credit Angel investors
Leases venture Capital Firms
Describe two risks to NOT growing your business.
Inflation, Depreciation, Competition has an opportunity to grow, hard to give employee raises or employment development. You might be left behind in your industry! You will not create new jobs.
DOUBLE JEOPARDY!
Describe in your own words what FCF is.
It is the total amount of money you would receive if you owned the entire company. This money is used to pay dividends, grow the company etc...
Describe the Price Anchoring Effect
Using your opening offer wisely because they have a strong effect on future negotiations.
DOUBLE JEOPARDY!
What other number can be added to a CVP Analysis (Break Even Analysis) as an option if you would like to include ____________.
Desired Profit!