A2 - Business - Making investment decisions 0.0 / 5 ? Business StudiesMaking investment decisionsA2/A-levelAQA Created by: jkavCreated on: 19-11-15 15:48 Investment appraisal The process of analysing the financial merits of a possible future investment. 1 of 7 Payback Calculation of how long it will take to recoup the cost of an initial investment. 2 of 7 Average rate of return (AVR) Average annual profit expressed as a percentage of initial investment 3 of 7 Net present value (NPV) The total net return of an investment stated in today's monetary value 4 of 7 Discount factor The rate by which future cash flows are reduced (discounted) to reflect current interest rates. 5 of 7 Time value of money Recognition of the fact that £1 in the future due to a fall in its purchasing power. 6 of 7 Investment criteria A pre-determined target against which to judge an investment. 7 of 7
Comments
No comments have yet been made