Investment Appraisal & Costing

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  • Created by: Alex
  • Created on: 23-03-14 12:55
Average Rate Of Return
Add up the profit each year & divide by how many years. Returned figure ÷ investment x 100 = %
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Payback
How many years will it take to return the cost of the project. See how close you can get to the cost, take the remainder from next year & ÷ by total year profit x 12 to get the months.
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Net Present Value ( Discounted Cash Flow)
Present Value = Cash Inflow x Discount Factor . Takeaway Investment Cost = NPV
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Depreciation
Original Value - Residual Value ÷ Useful Life
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Total Cost Variance
Standard cost of everything - Actual cost of everything
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Labour Cost Variance
Standard Labour Cost for production - Actual Labour Cost for production
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Materials Cost
Standard Material Cost for production - Actual Material Cost for production
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Overhead Cost Variance
Standard Fixed Overheads - Actual Fixed Overheads
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Material Price Variance
(Standard Price - Actual Price) x Actual Quantity
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Material Usage Variance
(Standard Quantity - Actual Quantity) x Standard Price
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Labour Rate Variance
(Standard Rate - Actual Rate) x Actual Hours Worked
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Labour Efficiency Variance
(Standard Hours - Actual hours) x Standard wage rate
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Overheads Fixed Variance
(Actual production x Standard Fixed overhead rate per unit) - Actual fixed overhead cost
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Overheads Variable
(Actual Production x Standard variable rate per unit) - Actual variable overhead cost
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Other cards in this set

Card 2

Front

How many years will it take to return the cost of the project. See how close you can get to the cost, take the remainder from next year & ÷ by total year profit x 12 to get the months.

Back

Payback

Card 3

Front

Present Value = Cash Inflow x Discount Factor . Takeaway Investment Cost = NPV

Back

Preview of the back of card 3

Card 4

Front

Original Value - Residual Value ÷ Useful Life

Back

Preview of the back of card 4

Card 5

Front

Standard cost of everything - Actual cost of everything

Back

Preview of the back of card 5
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