Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
11 Cards in this Set
- Front
- Back
|
7 Project categories |
1. Replacement: needed to continue current operations 2. Replacement: cost reduction 3. Expansion of existing products or markets 4. Expansion into new products or markets 5. Safety and/or enviromental projects 6. Other projects 7.Mergers |
|
|
Strategic Business Plan |
A long run plan that outlines in broad terms the firms basic strategy for the next 5 to 10 years |
|
|
Net Present Value |
A method of ranking investment proposals using the NPV, which is equal to the present value of the projects free cash flows discounted at the cost of capital |
|
|
Independent Projects |
Projects with cash flows that are not affected by the acceptance or non-acceptance of other projects |
|
|
Mutually exclusive projects |
A set of projects where only one can be accepted |
|
|
Internal Rate of Return |
The discount rate that forces a projects NPV to equal zero |
|
|
Multiple IRRS |
the situation where a project has two or more IRRS |
|
|
Net Present Value Profile |
A graph showing the relationship between a projects NPV and the firms cost of capital |
|
|
Cross-over Rate |
The cost of capital at which the NPV profiles of two projects cross and, thus, at which the projects NPVs are equal |
|
|
Payback Period |
The length of time required for an investments cash flows to cover its costs |
|
|
Discounted Payback |
The length of time required for an investments cash flows, discounted at the investments cost of capital, to cover its cost. |
