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9 Cards in this Set
- Front
- Back
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ROI |
= Net Operating Income / Average Operating Assets OR = Margin x Turnover |
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Margin |
= Net Operating Income / Sales |
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Turnover |
= Sales / Average Operating Assets |
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Average Operating Assets |
NET BOOK VALUE = Acquisition Cost - Depreciation |
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Residual Income |
= Net Operating Income - (Average Operating Assets x Minimum Required Rate of Return) |
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Payback Period |
= Investment Required / Annual Net Cash Inflow (does not include DEPRECIATION) |
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PV Factor for Internal Rate of Return |
= Investment Required / Annual Net Cash Inflow |
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Project Profitability Index |
= Net Present Value of Project / Investment Required |
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Simple Rate of Return |
= Annual Incremental Net Operating Income / Initial Investment (minus salvage of old equipment) |
