INVESTMENT APPRAISAL Flashcards
1
Q
What is investment appraisal
A
A management tool used to assess the financial viability of potential projects that compares cash outflow to cash inflow.
2
Q
What is the example of investment appraisal
A
A new shop in location A or location B?
Which new machinery would be most beneficial?
Should we open on the weekends
3
Q
What questions does investment appraisal answer
A
How quickly will the investment be returned
How much profit will the project earn
4
Q
What are the three methods of investment appraisal
A
Payback
Average rate of return
Net present value
