Distinguish Between Direct Finance and Indirect Finance

question 40

Essay

Distinguish between direct finance and indirect finance. Which of these is the most important source of funds for corporations in the United States?

Determine how technology and innovation influence supply-chain efficiency and competitive advantage.

Understand the role of logistics and transportation choices in the effectiveness of supply-chain management.

Understand the concept of compound interest and its advantages over simple interest.

Calculate future value of investments using different interest rates and compounding periods.

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Definitions:

Depreciable Cost

The total cost of an asset that is subject to depreciation, which includes the purchase price, import duties, transport costs, installation charges, and other expenses, less its salvage value.

Straight-Line Rate

A method of calculating depreciation expense for an asset, spreading its cost evenly over its estimated useful life.

Annual Straight-Line Depreciation

A method of calculating the depreciation of an asset which spreads the cost evenly over its useful life.

Units-Of-Output Method

A depreciation calculation method that spreads the cost of an asset over its useful output or units produced.