Adjusted present value (APV) The net present value analysis of an asset if financed solely by equity (present value of un-levered cash flows), plus the present value of any financing decisions (levered cash flows). In other words, the various tax shields provided by the deductibility of interest and the benefits of other investment tax credits are calculated separately. This analysis is often used for highly leveraged transactions such as a leverage buy-out. | BANKING AND FINANCIAL TERMS LFR 5HLV 2 RQVXOWRULD tQJXDV 5REHUWR GH 3DXOD LFR - QLRU OLFRUHLV WHUUD FRP EU 2 Dictionary of Finantial and Business Terms Lico Reis - Consultoria L nguas licoreis@ The Author Roberto de Paula Lico J nior is a lecturer in English as a Foreign Language and he has considerable expertise in the field of Overseas Trade having designed and taught a number of classes related to International Law and Overseas Trade. He has a SRVWJUDGXDWH GHJUHH LQ XURSHDQ XVLQHVV DQG DQJXDJHV 6RXWK DQN 8QLYHUVLW 2 QJODQG 2 DQG D LQ DZ 8QLYHUVLGDGH 6DOHVLDQD GH LUHLWR GH RUHQD QG KH DOVR FRQFOXGHG WKH GYDQFHG 2YHUVHDV 7UDGH RXUVH RQGRQ ROOHJH RI 3ULQWLQJ DQG LVWULEXWLYH 7UDGH QJODQG LQ DQG WKH RXUVHV LQ QWHUQDWLRQDO DQG PPLJUDWLRQ DZ LW 8QLYHUVLW QJODQG LQ DQG UHVSHFWLYHO 1RZDGD V KH OLYHV DQG ZRUNV LQ XDUDWLQJXHWi 6WDWH RI 6mR 3DXOR UD LO 3 Dictionary of Finantial and Business Terms Lico Reis - Consultoria L nguas licoreis@ Abandonment option The option of terminating an investment earlier than originally planned. Abnormal returns Part of the return that is not due to systematic influences market wide influences . In other words abnormal returns are above those predicted by the market movement alone. Related excess returns. Absolute priority Rule in bankruptcy proceedings whereby senior creditors are required to be paid in full before junior creditors receive any payment. Accelerated cost recovery system ACRS Schedule of depreciation rates allowed for tax purposes. Accelerated depreciation Any depreciation method that produces larger deductions for depreciation in the early years of a project s life. Accelerated cost recovery system ACRS which is a depreciation schedule allowed for tax purposes is one such example. Accounting exposure The change in the value of a firm s foreign currency denominated accounts due to a change in exchange rates. Accounting earnings Earnings of a firm as reported on its income statement. Accounting .
