Advanced Concepts 4 min read
Microeconomics: A Brief History
As early as the 18th century, economists studied the decision-making processes of consumers, a principal concern of microeconomics. Swiss mathematician…
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Advanced Concepts 2 min read
Microeconomics: Introduction
In most areas of human enterprise and endeavor, there’s a big picture and a little picture – the macro and…
General Concepts 3 min read
Uses of Break even analysis
Breakeven analysis is useful for the following reasons: · It helps to determine remaining/unused capacity of the concern once the breakeven…
General Concepts 1 min read
Calculation of Break-Even Analysis
The basic formula for break-even analysis is driven by dividing the total fixed costs of production by the contribution per…
General Concepts 3 min read
Opportunity Cost
What Is Opportunity Cost? Opportunity costs represent the benefits an individual, investor or business misses out on when choosing one alternative over…
General Concepts 3 min read
Time Value of Money (TVM)
What Is the Time Value of Money (TVM)? The time value of money (TVM) is the concept that money you have now…
General Concepts 3 min read
The Meaning of Equivalence
In order to evaluate investment alternatives, sums of money produced at different points in time must be compared. This is…
General Concepts 2 min read
Factor Formulas
The table below summarizes the equivalency factors . The Name column shows the traditional names for the factors. Each factor has a…
General Concepts 3 min read
Equivalent annual cost
In finance, the equivalent annual cost (EAC) is the cost per year of owning and operating an asset over its entire lifespan.…
General Concepts 1 min read
cost dominated cash flow diagram
Cash Flow Cash flow is the sum of money recorded as receipts or disbursements in a project’s financial records. A…
General Concepts 2 min read
WORKEDOUT PROBLEMS
Single-Payment Compound Amount A person deposits a sum of Rs. 20,000 at the interest rate of 18% compounded annually for…
General Concepts 3 min read
Annual equivalent method
In most of the practical decision environments, executives will be forced to select the best alternative from a set of…
