RECEIVABLE Definition

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RECEIVABLE is an amount awaiting receipt of payment.

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SHAREHOLDER LOANS include any loans between a corporation and any of its shareholders. Loans from shareholders are normally carried as long-term debt, but the reality is such loans should be counted as equity (they are not) because they rarely are paid back to the shareholder.

NET PRESENT VALUE (NPV) is a method used in evaluating investments, whereby the net present value of all cash outflows (such as the cost of the investment) and cash inflows (returns) is calculated using a given discount rate, usually REQUIRED RATE OF RETURN. An investment is acceptable if the NPV is positive. In capital budgeting, the discount rate used is called the HURDLE RATE and is usually equal to the INCREMENTAL COST OF CAPITAL.

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