year 2 Flashcards
1
Q
3 methods of investment appraisal?
A
- payback period (months/years)
- average rate of return (% return)
- discounted cash flow (£)
2
Q
how to calculate ARR?
A
average net return
——————————- X 100
investment
3
Q
what is ARR?
A
- compares the net return with the level of investment
4
Q
what is investment appraisal?
A
- process of analysing whether an investment project is worthwhile
5
Q
how to calculate payback period?
A
no. of complete years
——————————- X 12
next years amount to recover
6
Q
what is the mission and the hierarchy of objectives?
A
- aim (most strategic)
- mission
- corporate objectives
- functional objectives
- business unit (most detailed)
7
Q
what is payback period?
A
- time taken for a project to make enough money to pay back the investment
8
Q
what are objectives?
A
- statements of specific outcomes that are able to be achieved
