INCOME CAPITALIZATION: First you must determine the capitalization rate - a rate of return required to take on the risk of operating the business (the riskier the business, the higher the required return). Earnings are then divided by that capitalization rate. The earnings figure to be capitalized should be one that reflects the true nature of the business, such as the last three years average, current year or projected year. When determining a capitalization rate you should compare with rates available to similarly risky investments.
NOT SUFFICIENT FUNDS (NSF) CHECK is a bank check written against an inadequate balance. Also called insufficient-funds check and, informally, a bounced check.
COLLATERAL NOTE is a note secured by collateral. Same as secured note.
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