• Short-Run Operations in Financial Decision

A manufacturing planning period in which a business tries to meet the market

demand by keeping one or more production inputs fixed while changing others.
It varies with industries and differs from the long run in that the latter considers
all inputs as variables.

• Long-Run Operations in Financial Decision

A period of time where all factors of production and costs are variable. Over the
long run, a firm will search for the production technology that allows it to
produce the desired level of output at the lowest cost.

• Break-Even Point-Variable

The level of production at which the costs of production equal the revenues for a
product. In investing, the breakeven point is said to be achieved when the
market price of an asset is the same as its original cost.

• Fixed Expenses

These are costs that largely remain constant, such as your monthly rent or
mortgage. Variable expenses: These are costs that vary or are unpredictable,
such as dining out or car repairs.

• Time Value of Money

The concept that a sum of money is worth more now than the same sum will be at a
future date due to its earnings potential in the interim. The time value of money is
a core principle of finance. A sum of money in the hand has greater value than the
same sum to be paid in the future.