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Flashcards in Decisions exam prep Deck (32)
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1

Financing

Act of obtaining or furnishing money or capital for a purchase or enterprise.

2

Equity capital

The contribution that the owners make to the purchase of a business or its growth.

3

Debt capital

Borrowed funds.

4

P =

Principle, amount borrowed

5

I =

Interest, cost of borrowing

6

PPMT =

Principal Payment

7

Mortgage

A registered document that specifies property pledged as security for a loan. All mortgages are loans, but not all loans are mortgages

8

Mortgagee

Lender

9

Mortgagor

Borrower

10

IPMT =

Interest Payment

11

Table loan

Land, buildings, livestock. Regular payments are the same each time (unless interest rate changes). Interest charged only on outstanding principal (start with money towards interest, then money towards principal). Total interest paid depends on frequency of payments, the longer the term, the smaller the payments/time.

12

Term loan/reducing loan

Principal repaid in equal amounts through life of loan. Interest calculated on amount outstanding.

13

Flat loan/interest only

Often used for second mortgage. Second mortgage is needed if first is not enough to obtain the asset. Can only be used in the short to medium term to have more disposable income, can be changed at the end to a table loan, can be paid in full at the end.

14

Table loan equation

A = P x ((i(1+i)^n))/((1+i)^n-1))
A = payment per period
P = principal sum borrow
i = periodic interest rate (annual rate/no of payment periods)
n = no of period payments

15

Credit Worthiness (5 C's)

Character (record and appearance), capacity (ability to repay), collateral (assets as security), capital (borrowers stake/equity in business), conditions (external and internal)

16

Low cost strategy

Employ young people at low cost. Issues - work performance, staff turnover, breakages, drugs, absenteeism, motivation

17

Training focused strategy

Develop a reputation for providing high quality training for staff. Issues - attract high quality staff but staff turnover is a problem as they move onto better positions

18

High commitment strategy

Long-term strategy to build employee commitment - grow with the business

19

Employee resourcing

Employee a 'suitable' person. Once employed it is difficult to fire them if they are unsuitable. It involves two sub-processes - recruitment and selection

20

Recruitment

Requires the manager to plan and acquire staff. HR planning, job analysis and job description, selection and orientation

21

External forces that influence human resource management

Legal, customers, union/employees, labour market, political, labour market changes, society, globalisation, economic, industry, tech, shareholders

22

Recruitment

Requires the manager to plan and acquire staff. HR planning, job analysis and job description, selection and orientation. identify a job vacancy, define requirements for performance, gather applicants

23

Job description

Internal document that contains the essential job requirements, duties, responsibilities, and skills required. More detailed descriptions include title, essential functions, reporting relationships, authority level, tasks, duties, crucial features

24

Human Rights Act

prohibits discrimination between employees or potential employees

25

Private Act

applications cant request info that isn't used for employee selection

26

Fair Trading Act

the enterprise cannot misrepresent itself through its job advertising

27

Selection

Compare and assess applicant attributes in relation to job requirements, provide info to applicants so they can make informed decisions, notify applicants of employment status

28

Physical inventory

Stock (livestock, plants), grain, inputs (chemical, fertiliser)

29

Capital inventory

Machinery, infrastructure

30

Financial inventory

Bank accounts (credit, debit), cash, debtors, creditors