Equations

Question 1

Payback

Answer 1

(Amount required / Net cash flow in a year) X 12

Question 2

Average Rate Of Return (ARR)

Answer 2

(Net return (profit) per annum / Capital outlay (cost) ) X 100

Question 3

Discounted cash flow (net present value or NPV)

Answer 3

Amount X Discount

Question 4

Net cash flow

Answer 4

Cash inflows - cash outflows

Question 5

Success OR Failure

Answer 5

Probability X Estimated Effect On Profit

Question 6

Expected Value

Answer 6

Success - Failure