Finance Formulas Flashcards
1
Q
Straight line depreciation
A
Costs - residual value / estimated useful life
2
Q
Reducing balance depreciation
A
Net book value x depreciation rate
3
Q
Total contribution
A
Total revenues - total variable costs
4
Q
Contribution per unit
A
Selling price (per unit) - variable cost (per unit)
5
Q
Break even output
A
Fixed costs / selling price per unit - variable costs per unit (contribution per unit)
6
Q
Payback period
A
Look at cumulative cash flow and when it goes positive that’s how many years, then calculate to calculate months take the final negative and divide it bu the following years cash flow and x by 12 to get months
7
Q
Average rate of return (ARR)
A
Total net profit/number of years / initial investment x 100
