Other questions in this quiz

2. Cumulative Cash Flow (numbers vertically down)

  • Year 0 = Year 0 = total investment; then every year following = investment - annual profit
  • Year 0 = total investment; then every year following = Total annual profit
  • Every year = total investment;

3. Investment in new machinery - cash flow graph (Should investment be taken)

  • Years (Horizontal); Vertical - Capital expenditure; Savings; Disposal; Net cash flow; Discount factor; Present value = Net presnt value
  • Years (Vertical); Horizontal - Capital expenditure; Savings; Disposal; Net cash flow; Discount factor; Present value = Net presnt value

4. Payback period (PP) graph - Headings down the vertical axis

  • Years: 0, 1, 2, 3, 4,
  • Year; Cash flow; Cumulative cash flow

5. Accounting Rate of Return (ARR) =

  • Total annual profit / Average annual investment x 100
  • Total anual profit x life time until replacement (yrs) / life time until replacement (yrs)
  • Net profit per unit x replacement number
  • Total cost of unit x replacement number

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