What are Period Costs? Period costs are the indirect costs of production that cannot be capitalized on a company’s balance sheet. They show on the Income Statement. Product costs and period costs are two categories of costs that a company incurs producing and selling their product or service. A period cost […]
What Is Principal Curtailment? Principal curtailment for a mortgage or loan refers to making extra payments or paying periodic lump sums towards debt to pay it off faster. The additional payments are applied to the principal balance on the loan. The more extra payments you make, the faster the principal […]
What Is an Absolute Auction? An absolute auction is where real or personal property is sold to the highest bidder regardless of price with no set minimum or reserve. It is a type of auction in which the sale is awarded to the highest bidder. Absolute auctions do not have […]
What Is Backward Integration? Backward integration is a form of vertical integration. It occurs when a company expands its production role to accomplish tasks that were previously completed by companies up the supply chain. For example, a company might buy its supplier of inventory or raw materials. Merging with the […]
What Is the Consumption Function? The consumption function is an economic formula that represents the relationship between total consumption and gross national income. The consumption function, or Keynesian consumption function, is an economic formula. It represents the functional relationship between total consumption and gross national income. It was introduced by British […]
What is Extrinsic Value in Options Trading? Extrinsic value in options trading is the difference between an option’s strike price and the underlying asset’s price. It is also referred to as the premium. It is the portion of the worth that has been assigned to an option by factors other […]