Glossary - Agribusiness Management - page 420

capital budgeting A procedure for evaluating long-term investment decisions which takes
into account the timing of the cash fl ows associated with the investment, and the time
value of money.
capital intensity The proportion of tasks in a production or service process performed by
machines, relative to the tasks performed by humans.
capital investment The addition of long-lived assets, typically used in the production of
products or services, to an agribusiness.
capital lease A long-term contractual arrangement in which the lessee acquires control of
an asset in return for rental payments to the lessor.
capitalism An economic system based on private ownership of the means of production
and distribution of goods; characterized by a free, competitive market and an incentive
structure motivated by profi t.
Capper-Volstead Act of 1922 Important cooperative legislation ensuring the right of
farmers to organize and market their products collectively so long as the association
conducts at least half its business with members of the association and no member of the
association has more than one vote, or the association limits dividends on stock to 8
percent.
cash Funds that are immediately available for use without restriction, such as checking
account deposits in banks and petty cash.
cash-basis approach An accounting system of recognizing income when it is actually
received and expenses when they are actually paid.
cash budget A projection of a fi rm's cash receipts and cash requirements made on a peri-
odic basis to enable management to plan for and control cash.
cash fl ow statement An accounting statement reconciling the fi rm's cash balance between
two points in time; typically shows cash receipts and cash disbursements for a prior
accounting period but can also be used to project cash receipts and disbursements for a
future period of time.
chain of command In organizational structure, the authority-responsibility relationships
or links between managers and those they supervise.
chain store A set of 11 or more retail store locations operating under one management.
c hange in demand A situation where the demand curve shifts to the right or left signaling
a change in the quantity demanded at every specifi c price.
c hange in supply A situation where the supply curve shifts to the right or left signaling a
change in the quantity supplied at every specifi c price.
c hange in the quantity demanded A movement along a given demand curve.
c hange in the quantity supplied A movement along a given supply curve.
channel management A set of decisions concerned with who owns and controls the prod-
uct on its journey from manufacturer or producer to the customer, and the roles the dif-
ferent entities will play on this journey.
character In evaluating creditworthiness, the personal habits, conduct, honesty, and atti-
tude of the credit customer.
collateral Assets pledged to guarantee payment of a loan.
collective bargaining A process in which an employer and representatives of employees
(generally a union) attempt to arrive at an agreement governing the conditions under
which the employees are willing to work for the employer.
commercial banks An investor-owned institution that accepts deposits and then allows
checks to be written against those deposits as a means of making payments; the primary
source of borrowed funds for most agribusinesses.