key terms 3.3-Decision making techniques Flashcards
what is centring?
a method used in the calculation of a moving average where the average is plotted or calculated in relation to the central figure
what is a moving average?
a succession of averages derived from successive segments of a series of values
what is a time series analysis?
a method that allows a business to predict future levels from past figures
what is an average rate of return?
a method of investment appraisal that measures the net return per annum as a percentage of the initial spending
what is the capital cost?
the amount of money spent when setting up a new venture
what is a discounted cash flow?
a method of investment appraisal that takes interest rates into account by calculating the present value of future income
what is an investment?
the purchase of capital goods
what is an investment appraisal?
the evaluation of an investment project to determine whether or not it’s likely to be worthwhile
what is a net cash flow? FORMULA
cash inflows - cash outflows
what is net present value? FORMULA
the present value of future income from an investment project - the cost
what is the payback period?
the amount of time it takes to recover the cost of an investment project
what is present value?
the value today of a sum of money available in the future
what is a decision tree?
a technique which shows all possible outcomes of a decision
what is the earliest start time?
how soon a task in a project can be begin
what is a critical path?
the tasks involved in a project which if delayed could delay the project
