Equations Flashcards
1
Q
NPV “Net present value”?
A
Net revenue x Discount factor = NPV
2
Q
Steps to calculating NPV “Net present value”?
A
- Find NPV for all years.
- Add up all expected profit.
- Divide this answer by number by amount of years. (This is net return per annum)
- Minus this total number of the initial investment.
- x100 to get a percentage.
3
Q
Margin of safety?
A
Expected output - Breakeven output = Margin of safety
4
Q
Total contribution?
A
Sales revenue - Total variable costs = Total contribution.
5
Q
Contribution per unit?
A
Selling price per unit - Variable costs per unit = Contribution per unit.
6
Q
Total Contribution?
A
Contribution per init x Units sold = Total Contribution .
7
Q
Break-even?
A
Fixed costs + Contribution per unit.
8
Q
Gross Profit?
A
Revenue - Cost of goods sold = Gross profit.
9
Q
Net Profit?
A
Revenue - All Costs = Net Profit.
10
Q
Admin Costs?
A
Revenue - Costs that aren’t to do with making the product.
11
Q
Profit Margins?
A
Profit ÷ Sales x 100 = Profit margins.
