Module+19000+Vocabulary

- **__Capital investment __**: [|Money]  invested in a [|business venture]  with an [|expectation]  of [|income] , and recovered through [|earnings]  generated by the [|business]  over several years. It is generally understood to be used for [|capital expenditure]  rather than for <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|day-to-day] <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|operations] <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px;"> ( <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|working capital] <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px;">) or other <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|expenses] <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px;">.

- **__<span style="font-family: 'Arial','sans-serif'; font-size: 20px;">Capital investment decision (or “Capital budgeting”): __**<span style="font-family: 'Arial','sans-serif'; font-size: 20px;"> is the planning process used to determine a firm’s expenditures on assets whose cash flows are expected to extend beyond one year such as new machinery, equipment, etc. It is also the process of identifying, analyzing and selecting investment projects whose cash flows are expected to extend beyond one year such as research and development project.

- **__<span style="font-family: 'Arial','sans-serif'; font-size: 20px;">Opportunity cost definition __**<span style="font-family: 'Arial','sans-serif'; font-size: 20px;">: A <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|benefit] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;">, <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|profit] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;">, or <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|value] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;"> of something that must be given <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|up to] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;"> acquire or <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|achieve] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;"> something else. Since every <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|resource] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;"> ( <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|land] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;">, <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|money] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;">, time, etc.) can be put to alternative <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|uses] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;">, every <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|action] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;">, <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|choice] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;">, or <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|decision] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;"> has an <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|associated] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;"> opportunity <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|cost] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;">.

- **__<span style="font-family: 'Arial','sans-serif'; font-size: 20px;">Payback period: __**<span style="font-family: 'Arial','sans-serif'; font-size: 20px;"> is the length of time required to recover the <span style="color: #000000; font-family: 'Arial','sans-serif'; font-size: 20px; text-decoration: none;">[|cost] <span style="font-family: 'Arial','sans-serif'; font-size: 20px;"> of an investment.

- **__<span style="font-family: 'Arial','sans-serif'; font-size: 20px;">Accounting rate of return __****//<span style="font-family: 'Arial','sans-serif'; font-size: 20px;">: //**<span style="font-family: 'Arial','sans-serif'; font-size: 20px;">the rate of return obtained by dividing the average accounting net income by the original investment (or by average investment).

- **__<span style="font-family: 'Arial','sans-serif'; font-size: 20px;">Net present value __****//<span style="font-family: 'Arial','sans-serif'; font-size: 20px;">: //**<span style="font-family: 'Arial','sans-serif'; font-size: 20px;">the difference between the present value of a project’s cash inflows and the present values of its cash outflows.

- **__<span style="font-family: 'Arial','sans-serif'; font-size: 20px;">Internal rate of return __****//<span style="font-family: 'Arial','sans-serif'; font-size: 20px;">: //**<span style="font-family: 'Arial','sans-serif'; font-size: 20px;">the rate of return that equates the present value of a project’s cash inflows with the present value of its outflows (i.e., it sets the NPV equal to zero). Also, the rate of return being earned on funds that remain internally invested in a project.