Author: admin

What Is Procurement? Procurement is the act of obtaining or purchasing goods or services, typically for business purposes. Procurement is most commonly associated with businesses because companies need to solicit services or purchase goods, usually on a relatively large scale. It can also include the overall procurement process, which is critically important for companies leading

What Is a Prime Cost? Prime costs are a firm’s expenses directly related to the materials and labor used in production. It refers to a manufactured product’s costs, which are calculated to ensure the best profit margin for a company. The prime cost calculates the direct costs of raw materials and labor that are involved in

What Is Prime Credit? Prime credit refers to a credit score that is one level below super prime, the highest credit rating. Consumers with prime credit have very good credit and pose little risk to lenders and creditors. Lenders and credit card companies offer some of their top loans and cards with the lowest interest

What Is the Prime Rate? The term prime rate refers to the interest rate that commercial banks charge their most creditworthy customers. The Federal Reserve (Fed) sets the federal funds overnight rate which serves as the basis for the prime rate, which is the starting point for other interest rates. The prime rate (sometimes referred

What Is Principal? Principal is most commonly used to refer to the original sum of money borrowed in a loan or put into an investment. It can also refer to the face value of a bond, the owner of a private company, or the chief participant in a transaction. Key Takeaways The term “principal” has

What Is the Principal-Agent Problem? The principal-agent problem is a conflict in priorities between a person or group and the representative authorized to act on their behalf. An agent may act in a way that is contrary to the best interests of the principal. The principal-agent problem is as varied as the possible roles of

What Is the Principal-Agent Relationship? The principal-agent relationship is an arrangement in which one entity legally appoints another to act on its behalf. In a principal-agent relationship, the agent acts on behalf of the principal and should not have a conflict of interest in carrying out the act. The relationship between the principal and the

What Is a Principal Exchange Rate Linked Security (PERL)? A principal exchange rate linked security (PERL) is a type of investment in debt that pays interest semiannually and has a yield that is linked to foreign exchange rates. That is, the principal repayment amount is determined by the exchange rate of a certain currency in

What Is a Principal Order? The term principal order refers to an order in which a broker-dealer buys or sells for its own account as opposed to carrying out trades for the brokerage’s clients. Principal orders are done at the broker-dealer’s own risk. The broker-dealer must provide notification to the exchange where the trade. These

What Is a Principal Private Residence (Canada)? A principal private residence is a home a Canadian taxpayer or family maintains as its primary residence. A family unit can only have one principal private residence at any given time. In order to qualify, the property must be owned by the taxpayer or couple, or fall inside a