Shared Flashcard Set

Details

Financial
FV Module
4
Accounting
Undergraduate 3
10/22/2010

Additional Accounting Flashcards

 


 

Cards

Term
What is the "capitalization rate"?
Definition

the expected stability in the rental income that a building could generate if it were rented.

 

Calculation:

amount of rental income / the buildings price

 

Higher rates indicate that the expectation is risky

Term
Present value of an infinite series
Definition

First "Perpetuity" Cash Flow / (discount rate - growth rate)

 

Then discount further if necessary

Term
Adjusted Replacement Cost
Definition

(Cost to duplicate - Salvage Value) / Useful Life = "depreciation" per year

 

Years Used * "depreciation per year" = total "depreciation"

 

Cost to duplicate - "depreciation" = adjusted replacement cost

Term
Fair Value Disclosures
Definition

Level 1 inputs - quoted prices in active markets for identical assets (or liabilities)

 

Level 2 inputs - observable inputs other than quoted prices in active markets for identical assets (or liabilities)

 

Level 3 inputs - unobservable inputs

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