Examlex
Compare and contrast debt financing and equity financing.
Implicit Interest Rate
Implicit interest rate is the interest rate implied in the terms of a lease or loan, calculated based on the initial amount and the future payments or receipts.
Incremental Borrowing Rate
The interest rate a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments.
Salvage Value
The estimated resale value of an asset at the end of its useful life, considered in depreciation calculations.
Straight-Line Depreciation
A method of allocating the cost of a tangible asset over its useful life in equal annual amounts, representing the asset's expense.
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