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Understanding the Fed
Understanding the Fed

Chapter 9
Chapter 9

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... ANNEX I. In connection with the Acquisition, the Borrower will either (i) issue $200,000,000 in aggregate principal amount of its senior subordinated unsecured notes (the "Senior Subordinated Notes") in a public offering or Rule 144A or other private placement or, (ii) in the event that the Borrower ...
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... exists and the sales price is fixed and determinable. The Company records shipping and handling amounts billed to retailers as wholesale revenues, with the related costs recorded in cost of revenues. Direct expenses related to retail services are included in cost of revenues and indirect expenses fr ...
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View MDA - Till Capital

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... loan to its customers the bank charges an interest rate that is composed by the inter-bank rate for the corresponding term and a credit spread. On the other hand, the interest that banks pay for balances on their clients current accounts is much lower. And the difference between the two rates normal ...
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Assessing the Impact of Fair Value upon Financial Crises

... Usually the reform of accounting principles in accordance with fair value is assumed to provide better information about the financial situation of firms. Consequently the related transparency should reinforce the resilience of the economy to shocks and thus prevent severe financial crises. A carefu ...
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Present value

In economics, present value, also known as present discounted value, is the value of an expected income stream determined as of the date of valuation. The present value is always less than or equal to the future value because money has interest-earning potential, a characteristic referred to as the time value of money, except during times of negative interest rates, when the present value will be greater than the future value. Time value can be described with the simplified phrase, “A dollar today is worth more than a dollar tomorrow”. Here, 'worth more' means that its value is greater. A dollar today is worth more than a dollar tomorrow because the dollar can be invested and earn a day's worth of interest, making the total accumulate to a value more than a dollar by tomorrow. Interest can be compared to rent. Just as rent is paid to a landlord by a tenant, without the ownership of the asset being transferred, interest is paid to a lender by a borrower who gains access to the money for a time before paying it back. By letting the borrower have access to the money, the lender has sacrificed the exchange value of this money, and is compensated for it in the form of interest. The initial amount of the borrowed funds (the present value) is less than the total amount of money paid to the lender.Present value calculations, and similarly future value calculations, are used to value loans, mortgages, annuities, sinking funds, perpetuities, bonds, and more. These calculations are used to make comparisons between cash flows that don’t occur at simultaneous times. The idea is much like algebra, where variable units must be consistent in order to compare or carry out addition and subtraction; time dates must be consistent in order to make comparisons between values or carry out simple calculations. When deciding between projects in which to invest, the choice can be made by comparing respective present values of such projects by means of discounting the expected income streams at the corresponding project interest rate, or rate of return. The project with the highest present value, i.e. that is most valuable today, should be chosen.
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