Financial management Formula's Flashcards
1
Q
Annual depreciation (straight line) ?
A
Initial cost - disposal value / years of useful life
2
Q
Present value of cash flow in year n ?
A
Cash flow year n X discount factor of r at year n
r = required return or cost of capital
3
Q
ARR ?
Average investment?
A
(Average annual profit / Average investment to earn that profit ) X 100
Average investment = Initial value invested + disposal value / 2
