Project Appraisal Flashcards
1
Q
Internat Rate of Return
A
Rate at which the project has 0 NPV
C0 + C1/(1+IRR) + C2/(1+IRR)^2 + … + Ct/(1+IRR)^t = 0
2
Q
Payback period
A
Period which elapses until the initial outlay has been recouped
3
Q
Profitability index
A
(NPV/Initial interest) +1
4
Q
Depreciation Tax Shield
A
Depreciation x Tax
5
Q
Tax Saving on book loss
A
Book loss x tax rate
6
Q
Working Capital
A
Average level of stocks which allows uninterrupted production
