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borrowing
Junior Cert Business Studies
| Term | Definition |
|---|---|
| Mortgage | loans used to finance the purchase of a house or other property= |
| Retained Earnings | profits retained in the business to allow it to expand in the future= |
| Owners Capital | finance invested in the business by the owners= |
| Debentures | long term fixed interest loans secured on a valuable asset, such as premises= |
| Sale and Leaseback | contract to raise cash by selling a piece of property and then leasing it back on a long-term lease= |
| Government Grants | money given by the state to a business to help it start up, expand or research= |
| Business Plan | what the owners of a business see happening to their business over a period of time= |
| Cash flow forecasts | a business’s estimate of the future timing and source of its income and the future timing and nature of its expenditure= |
| positive cashflow | when income exceeds payments= |
| negative cashflow | when payments exceed income= |
| Borrowing | borrowing the money and repaying the lending agency in the future= |
| Factors to be considered before borrowing | Do we need the goods/services= |
| Collateral/security | means that you hand over or sign over some valuable asset= |
| Flat rate of interest | interest is charged on the original loan amount over the full duration of the loan= |
| True rate of interest | interest is charged on the reducing balance of the loan i.e. it is calculated on the amount outstanding after each instalment is paid= |
| APR | (Annual Percentage Rate) and it includes other costs in taking out a loan= |
| Bankruptcy | If a person borrows and is unwilling or unable to repay his/her debts, he/she can be declared bankrupt by the highcourt= |
| Renting/leasing | When you lease/rent something you have use of the item e.g. television but you will never own it. A payment is made regularly for the use of the item= |
| Hire purchase | system of buying goods on credit by paying an initial deposit and paying the balance owed by regular instalments over an agreed period of time= |
| Deferred Payment | Consumers purchase goods and pay for them over a fixed period of time. A deposit is paid and the remainder is paid by way of fixed instalments= |
| Accrued Expenses | delaying payment of bills and using the money to pay a more urgent expense= |
| Term Loans | a medium term loan from a bank repaid in monthly instalments over a number of years= |
| Leasing | renting an item, such as a vehicle or a piece of equipment, for a number of years= |
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