Breakeven & Investment Appraisal Flashcards
1
Q
Calculate variable costs from two outputs
A
Change in cost divided by change in units
2
Q
Breakeven
A
Fixed cost / contribution per unit
3
Q
Contribution
A
Sales price less variable costs
4
Q
Payback period
A
When net cashflows reach zero - rememver the initial period is Y0
5
Q
Discounting 15%
A
Number X 1.15^-N
6
Q
ARR
A
Percentage of the anyal PROFIT over the INITIAL investment
7
Q
ROI
A
A percentage of the annual PROFIT over thr AVERAGE investment
8
Q
NPV
A
Net present value - all future cashflowd discounted to present value
9
Q
NPV perpetual 15%
A
1/0.15 x amount
10
Q
NTV
A
Net terminal value is the cash surplus at the end of a project after taking account of interest and capital repayments
11
Q
IRR formula
A
L%+ NPV(L) / ( NPV(L) - NPV(H) ) x (H%-L%)
