Ch. 8 NPV Flashcards
0
Q
NPV
A
PV of CF - investment
1
Q
Opportunity cost of capital
A
Expected rate of return given up by investing in a project
2
Q
Equivalent annual annuity
A
PV of Costs/annuity factor
3
Q
IRR
A
Discount rate at which NPV=0
4
Q
Profitability index
A
NPV/investment
5
Q
Capital rationing
A
Limit set on the amount of funds available for investment.