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3 Cards in this Set
- Front
- Back
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Payback Period |
Additional net cash inflow needed/annual net cash flow in the last negative year * 12 months |
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Accounting rate of return |
1. Add up all positive cash flows 2. Subtract cost of investment 3. Divide by life span 4. Calculate the % return to find the ARR by dividing by the capital cost and *100 |
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Net present value |
1. Multiply discount factors by net cash flows. Cash flows in year 0 are not discounted 2. Add discounted cash flows 3. Subtract capital cost to give the NPV |
