3.8 Investment Appraisal
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5 Terms
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investment
purchase of an asset with the potential to yield future financial benefits.
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investment appraisal
refers to the quantitative (financial) approaches to evaluate the costs and benefits of an investment decision.
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payback period
The payback period (PBP) refers to the time it takes for an investment project to earn enough profit to repay the cost of the initial investment.
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average rate of return
calculates the average profit of an investment project as a percentage of the amount invested
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net present value
work on the present value of the return on investment
Note 
Flashcards (104)