Chapter 2 Flashcards
Able to move quickly and easily
Agile
A methodology that converts an organization’s value drivers to a series of defined metrics
Balanced scorecard
Benefits minus cost, or income minus expenses
Cash flow
The new requirements imposed by management, government, or some external influence.
Directives
Costs that organizations have discretion in deciding whether to fund them
Discrectionary costs
A multiplier for each year based on the discounted rate and year
Discount factor
The rate used in discouting future cash flows
Discount rate
The discount rate that results in an NPV of zero for a project
Internal rate of return (IRR)
A technique the uses branches radiating out from a core idea to structure thoughts and ideas
Mind mapping
A method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time
Net present value (NPV) analysis
Costs that organizations must fund to stay in business
Nondiscretionary costs
The return available by investing the capital elsewhere
Opportunity cost of capital
The amount of time it will take to recoup, in the form of net cash inflows, the total dollars invested in a project
Payback period
The minimum acceptable rate of return on an investment
Required rate of return
(Benefits minus cost) divided by cost
Return on Investment (ROI)
