Financial Maths Flashcards
1
Q
Annuities
A
Equal cash payments
Received or made at regular intervals
Over a specified period of time
2
Q
Perpetuities
A
equal cash payments
received or made at regular intervals
over an unspecified period of time
£x / r
3
Q
DCF used for project appraisal
A
NPV
IRR
4
Q
NPV
A
PVi-PVo
5
Q
problems with IRR
A
> ignores qty of earnings
cannot be calculated when discount rate is variable
if number of inflows and outflows over the years can result in several IRR
big difference between the IRR and the project discount rate then hard to choose
