Capital Budgeting Flashcards
1
Q
Payback Period
A
Initial Investment / after tax annual net cash inflows
2
Q
Internal Rate of Return (pv factor)
A
Initial Investment / annual cash flows
3
Q
Accounting Rate of Return (ROI)
A
Accounting Income / Average Investment
4
Q
Net Present Value
A
(pv cash inflow - pv cash outflow) / net pv
5
Q
profitability index
A
pv future cash flows / initial investment
6
Q
payback period
A
initial investment / after tax net cash inflows
7
Q
IRR PV Factor
A
Investment/annual cash flows
8
Q
return on assets
A
net income / average total assets
9
Q
econ value added
A
net opertating profit after taxes - cost of financing
10
Q
Depr tax sheild
A
tax rate * amt of depr
