year 2

Question 1

3 methods of investment appraisal?

Answer 1

• payback period (months/years)
• average rate of return (% return)
• discounted cash flow (£)

Question 2

how to calculate ARR?

Answer 2

average net return
——————————- X 100
investment

Question 3

what is ARR?

Answer 3

• compares the net return with the level of investment

Question 4

what is investment appraisal?

Answer 4

• process of analysing whether an investment project is worthwhile

Question 5

how to calculate payback period?

Answer 5

no. of complete years
——————————- X 12
next years amount to recover

Question 6

what is the mission and the hierarchy of objectives?

Answer 6

• aim (most strategic)
• mission
• corporate objectives
• functional objectives
• business unit (most detailed)

Question 7

what is payback period?

Answer 7

• time taken for a project to make enough money to pay back the investment

Question 8

what are objectives?

Answer 8

• statements of specific outcomes that are able to be achieved