component 2 formulas

Question 1

contribution per unit

Answer 1

selling price- variable cost per unit

Question 2

total contribution

Answer 2

= contribution per unit x units sold

Question 3

profit

Answer 3

total contribution- fixed costs

Question 4

net cash flow

Answer 4

inflow - outflow

Question 5

payback

Answer 5

cumulative cash flow value- for the last year of - figures / NCF for the year after X12

Question 6

ARR

Answer 6

average annual profit - final cumulative cash flow value/ lifetime of project

AAP/ initial cost of investment X 100 = %

higher the % more attractive

Question 7

NPV

Answer 7

NCF X discount value = present value

NPV= add up all present values - cost of intial investment