Topics 52-55 (Maths) Flashcards
Three period moving totals
Yr1 + Yr2 + Yr3
÷
3
8 year moving total
4pmt1 + 4pmt2 = 8ymt
Four period moving averages
8 year moving total
÷
8
Line of best fit definition
The line of best fit should pass through the coordinates (X,Y) where X is the average of the years and Y is the average sales.
Line of best fit formula for x
∑X (total years)
÷
N (number of years)
Line of best fit formula for y
∑Y (total sales in the trend)
÷
N (number of years)
Variation from the trend
Actual sales - trend
Correlation coefficient
∑XY
÷
√ (∑X2) (∑Y2)
Cumulative net cash flow definition
Cumulative net cash flow shows the amount left of a project’s initial cost left to pay back in brackets. Once this number gets to zero, do not put brackets.
Simple payback formula and when is it used
If it goes past zero but does not land on zero, use this formula to see how many months it is
Amount required (left to pay after previous year)
÷
Net cash flow that year
x 12
Average (accounting) rate of return (ARR)
(Steps not formula)
- Inflows - Outflows
- Sum of net cash flows
- Minus Initial Cost
- Divide by timeframe
- Divide by initial cost
- X 100
Present value
Net cash flow X discount rate
Net present value
Total present value - initial cost
Expected monetary value (EMV)
(p) x (expected profit) + (p) x (expected profit)
(sucess) + (failure)
Rollback technique
Rollback technique is where the EMVs are worked out right to left. When two nodes go into one (a decision node), minus any costs of that option.
