Business Finance and Project Management Concepts

A comprehensive set of vocabulary flashcards focusing on business finance and project management concepts derived from the lecture notes.

Cannibalization Risk

The risk that a new product will eat into the sales of an existing product.

Unlevered Free Cash Flows

The cash flows available to all capital providers before paying any debts.

Debt Service Coverage Ratio (DSCR)

A financial ratio used to measure a company's ability to service its debt.

Project Finance

The method of raising funds for a project based on the project's cash flows rather than on the balance sheets of its sponsors.

Debt Service Reserve Account (DSRA)

A reserve account set aside to cover temporary shortfalls in debt service.

Pass-Through Principle

In project finance, the principle where costs and revenues are transferred through the Special Purpose Vehicle (SPV).

Maintenance Reserve

Funds set aside to cover future maintenance costs of a project.

Adjusted Present Value (APV) Model

A valuation method that separates the value of an unlevered project from the tax benefits of financing.

Interest Tax Shield

The reduction in income taxes that results from the tax-deductibility of interest payments.

Sustainable Growth Rate (G*)

The maximum rate at which a company can grow its sales, given its financial policies and profitability.

Agency Costs

Costs that arise from conflicts between owners and management of a company.

Operating Expenses (OpEx)

The ongoing expenses incurred from normal business operations.

Capital Expenditure (CapEx)

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Project Neptune

A case study in structured project finance for Disney Cruise Line's expansion.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock.

Financial Flexibility

The ability of a company to take actions to respond to risks and opportunities.

Unique Selling Proposition (USP)

An attribute that makes a product different from its competitors.

Cash Conversion Cycle

The time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Net Working Capital (NWC)

The difference between a company's current assets and current liabilities.

Equity Carve-Out

A type of corporate restructuring where a parent company sells a minority stake in a subsidiary.

Book Building

The process of generating interest in an IPO, allowing investors to indicate interest in shares.