Debt Financing or Borrowed Funds

A borrowed funds or debt financing is the combination of the funds raised by the way of credit or loans. It is the proceeds of an organization to raise the operating or other capital by borrowing. Most frequently, this may be achieved through issuance of a debenture,...

Internal Rate of Return (IRR)

Some firms calculate the net present value NPV of a project for knowing its work and few firms prefer to calculate the internal rate of return (IRR) to know whether project’s return is lower or greater than the opportunity cost of given project’s capital. For example,...

How to Calculate Net Present Value

Net present value is generally known as NPV. It is an investment criterion to evaluate any project. Chief financial officers generally used NPV as investment criteria in the investment decision known as capital budgeting and it is the pivotal to the success of the...

Preference and Equity Share Difference

There is great difference between preference shares and equity shares in terms of characteristics and conditions. Preference shares have the characteristics of equity as well as debt instrument. On the other hand, equity shares only represent ownership in the company....

Difference between Share and Debenture

There are many differences between share and debenture. For example, Debenture is an acknowledgement of debt and the debenture holders do not have voting rights. The holders only receive interest revenue which is a fixed sum. Whereas, shares are simply a part of firm...

Types of Promissory Note

A promissory note is a negotiable instrument, which refers to unconditional, written and signed promise by the maker or issuer to pay a specific amount of money to a payee on demand or at a particular future date. A promissory note differs from IOUs and bill of...
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