NVP & IRR Flashcards
1
Q
investment appraisal
A
the acquisition or disposal of assets with a lifespan of 1 year or longer. Involves comparing costs and benefits of various decisions
2
Q
making investment decisions
A
involves commiting capital today for future payments
3
Q
pay-back period
A
time it takes to recover the initial investment
4
Q
Discounted Cash Flow (DCF) technique
A
an investment valuation approach based on future cash flows
5
Q
Net Present Value (NVP)
A
difference between present value of all future benefits and present value of all costs
