Discount rates, also known as discount factors, refer to the interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows. Another meaning of the term “discount rate” is the rate used by pension plans and insurance companies for discounting their liabilities. Third system of calculating discount rate…
MUDRA stands acronym for Micro Units Development & Refinance Agency Ltd. It is an institution of Government of India set up for development and refinancing activities relating to non-corporate micro-units. At present MUDRA is set up as a subsidiary of SIDBI, pending statutory enactment by the Government. Traditionally commercial banks and financial institutions in India…
Companies across the world, while reporting the financial statement abide by the specific accounting regulations of their country of business. For example, companies that have business activities in India have to adopt the Indian Accounting Standard (abbreviated as Ind-AS) while reporting the financial statement, similarly, the Generally Accepted Accounting Principles (GAAP)’ of the US are…
Benefit to cost ratio is used to calculate the NPV in a proportion or ratio format. Here, the present value of future cash flows is calculated on proportion method, though, the method of calculation is similar to NPV method. Benefit to cost= Present value of investment/ present value (PV) of future inflows. If the ratio…
The Financae Minister Mr.Arun Jaitley, said that Cabinet approves 2.11 lakh crore recapitalization package to public sector banks. Of 2.11 crore, Rs 1.35 lakh crore will come from recap bonds, while the rest will come from the market and budgetary support.Finance minister informed that the entire Rs 2.11 lakh crore of capitalisation will be spread…
The Ministry of Rural Development, Government of India is operating a scheme namely ‘Interest Subvention Scheme under Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM)’. The funding for the scheme will be met out of Central Allocation under DAY- NRLM. This scheme is limited to Women Self Help Groups in rural areas only and…
EMI is acronym to an equated monthly installment (EMI). It is a fixed amount payable by a borrower to a lender at each calendar month at a stated date. Under this system the principal and interest thereon is repaid through equal monthly interest over the fixed tenure of the loan. EMI is fixed based on…
When a lender grants loan to a borrower, he charges fee (interest) on money lent. The interest payable by the borrower may be simple interest or compound interest. Simple interest means interest charged at flat rate only on the principal amount. In the other words the interest will not be charged on the interest debited…
Banks provide a number of credit facilities to customers engaged in activities related to agriculture. Many a time banks take the brunt when unforeseen disaster strikes the farmers in the form of ‘on-farm loss’ and or ‘off-farm losses. These types of losses caused mainly due to production risk and price risk. The risk management in…
The farmers in India have been inherently facing with on-farm risks like famine; flood, extreme weather etc. Though these types of natural risks cannot be totally avoided, there are many new on-field techniques developed in India to minimize the loss. However, the most important strategy to mitigate the risk is agriculture insurance. The insurance company…
