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FINANCE - Coggle Diagram

- - - - Discount rate
        Interest rate used to calculate the present value of a future flow. The discount rate is used to calculate the present value of future cash flows; that is, the returns expected after the investment is made. The discount rate should be the rate of return required for the cash flows that are associated with the acquisition or investment, which should show the risk associated with the use of the funds, not with the source of the funds.
  - - - Definition of analysis criteria in investments
        In most organizations or private companies, financial decisions are focused or have a clear objective, "the maximization of wealth" through profits, this fact in the current conditions, must be refocused on a criterion of "wealth maximization" and the creation of "business value".
        
        Investment risk
        The risk of an investment is measured by the variability of the possible returns around the average or expected value of the returns, i.e. the risk is given by the deviation of the probability function of the possible returns.
        
        Required rate of return on investment
        The Required Rate of Return is the minimum rate of return that must be required from an investment for it to be accepted. In determining this rate, all internal and external factors that influence the investment decision must be taken into account.
    - - Net present value and capital budget
        The capital budget covers the entire process of planning expenditures whose returns are expected to extend beyond one year. Of course, the choice of a one-year period is arbitrary, but it is a convenient benchmark for distinguishing different types of expenditures.
        
        Analysis of the investment decision
        Technical Analysis is a tool that facilitates investment decision making without the need for complex knowledge of economics, mathematics or statistics.
        
        The debt decision
        The decision of indebtedness of the project is accepted, as long as, the project operationally obtains a rate of return higher than the cost of the debt, if this happens, indisputably the option to amortize the credit, is the one where the amortization is delayed independently of the amount of interests paid.
- - - - Economic or Interest Conflicts
        It is economic or of interest, when it aims at creating new working conditions or modifying existing ones. The economic conflict is a contest that has to do with the creation of a new legal status.