Renewable Energy Certificate (REC).

In the United States, a Renewable Energy Certificate (REC) represents the environmental attributes of one megawatt-hour (MWh) of electricity generated from a qualifying renewable energy resource. One REC is equal to one MWh of electricity generated and delivered to the grid from a renewable resource. Renewable energy certificates are created as a way to encourage … Read more

Net Present Value (NPV) Rule: Definition, Use, and Example.

What Is the Net Present Value Rule? The net present value (NPV) rule is a financial decision-making tool that businesses use to evaluate investment opportunities. The NPV rule states that businesses should only invest in projects with positive NPVs; that is, projects whose present value is greater than their initial investment. To calculate NPV, businesses … Read more

Understanding Accounting Ratios.

Accounting ratios are mathematical relationships derived from an entity’s financial statements. The purpose of using accounting ratios is to give users of financial statements insights into an entity’s relative financial health and performance. Financial ratios can be classified in a number of ways, but are commonly grouped by the type of information they provide. For … Read more

Third Party.

A third party is an entity that is not directly involved in a transaction but may be affected by it. In the context of investing, a third party may be a company or individual that provides services or products to the companies or individuals involved in the investment. For example, a broker may be a … Read more