BFS Flashcards

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Capital Investment

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Expenditure of money to acquire assets intended to generate future revenue or cost savings.

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Payback Period

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The length of time required for an investment to generate enough cash flow to cover its initial cost.

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Net Present Value (NPV)

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A method of capital budgeting used to assess the profitability of an investment by discounting all future cash flows back to their present value.

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Cost of Capital

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The rate of return a company must earn to satisfy its investors and creditors; used as the discount rate in NPV calculations.

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Discount Rate

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The interest rate used to determine the present value of future cash flows. This can be equivalent to the cost of capital or the desired rate of return for the project.

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Time Value of Money

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The concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

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21st Century Skills

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A set of competencies needed for success in the modern world, such as critical thinking, problem-solving, communication, and creativity.

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Critical Thinking

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The ability to analyze information objectively and form reasoned judgments.

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Communication

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The process of conveying information effectively, both orally and in writing.

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Corporate Governance

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The system of rules, practices, and processes by which a company is directed and controlled.