investment appraisal Flashcards
1
Q
investment
A
the purchase of capital goods
2
Q
capital goods
A
goods used in the production of other goods
3
Q
investment appraisal
A
allows a business to look at a range of investments objectively to determine which is most likely to be the most profitable
4
Q
payback period
A
amount of time it takes to recover the cost of an investment
5
Q
capital cost
A
amount of money spent on setting up new venture
6
Q
why would a business invest in capital goods
A
keep up with technological change lower labour costs reduce waste higher productivity increase profitability lower unit costs
