What is the Magnetic Ink Character Recognition (MICR) Line? The term Magnetic Ink Character Recognition (MICR) refers to the small digital characters at the bottom of a check or a financial document. The MICR line is a set of digital numbers that represent the bank routing number, account number, and check number. The…
What is a Make-or-Buy Decision? A make-or-buy decision refers to an act of using cost-benefit to make a strategic choice between manufacturing a product in-house or purchasing from an external supplier. It arises when a producing company faces a diminishing capacity, experiences problems with the current suppliers, or sees changing demand. The make-or-buy decision compares…
What is a Managed Account? A managed account is a portfolio of stocks or bonds – or a combination of the two – that is owned by a single manager. The investor hires a professional investment manager to oversee the account’s operations to achieve specific objectives, such as long-term growth or current income. It is…
What is Manufacturing? Manufacturing refers to the processing of finished products from raw materials using various methods, human labor, and equipment according to a detailed plan in a cost-effective way. Large-scale manufacturing uses core assets, including assembly line processes and sophisticated technologies for the mass production of goods. Manufacturers take advantage of the economies of…
What are Maintenance Expenses? Maintenance expenses are costs incurred on a regular basis to keep an asset working in its optimal condition. Maintenance costs come into play when a person purchases an asset, such as a motor vehicle, speed boat, or even a condo. The asset requires ongoing maintenance during their useful life to keep…
What is Indirect Security? Indirect security refers to a type of security that a borrower provides against a loan, and is not directly related to the assets pledged as collateral. Usually, when a lender extends credit facilities to a borrower, they require the borrower to pledge certain assets as security for the loan. The type…
What is a Macro Manager? A macro manager is a type of boss who allows employees to carry out their responsibilities independently. Such managers are more concerned with the results obtained by the employees’ inputs, rather than the day-to-day habits of their subordinates. Such a type of leadership is also known as macro-management. Some employees…
What is High Finance? High finance refers to complex financial transactions that involve a huge amount of money. It is often associated with unethical practices when lending, borrowing, or investing large amounts of money. A large proportion of senior professionals working in the financial sector – including bankers, managers, and funders – engage…
What is Negative Amortization? Negative amortization occurs when the principal amount on a loan increases gradually because the loan repayments do not cover the total amount of interest costs for the period. It occurs because borrowers are allowed to make reduced payments for a certain period within the term of the loan. Therefore, the payments…
What is a Vesting Schedule? A vesting schedule is an incentive program established by an employer to give employees the right to certain asset classes. Employers use such type of incentive to reward loyal employees who remain with the company for a long period. A vesting schedule gives employees full ownership rights to employer-provided assets…
