209 Investment appraisal Flashcards
1
Q
Investment appraisal
A
A technique used to evaluate planned investment by a business and measure its planned financial value to the business
2
Q
Payback
A
The amount of time it would take for a business to recover a projects initial costs
3
Q
Average rate of return (ARR)
A
Measures the average annual profit as a % of the initial investment
4
Q
Discounted cashflow / net present value
A
This takes account of the “time value of money” which recognises that money earned today is less than previously.
