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Business involves the interaction of individuals and individual organizations for the exchange of products, services, and capital through markets. The global capital markets are critical for the conduct of this exchange. The authors suggest that one way to characterize the global financial marketplace is through its assets, institutions, and linkages. Explain how each of the three dimensions characterize the global financial marketplace.
Net Present Value
A calculation that estimates the present value of all future cash flows of an investment, minus the initial investment cost.
Straight-Line Depreciation
A technique for distributing the expense of a physical asset evenly across its life span.
Average Accounting Return
A measure of the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.
Average Total Assets
The mean value of all assets owned by a company over a specific period, used in financial analysis to gauge the company's asset use efficiency.
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