Average Rate of Return (ARR) gives the annual Net Cash Flows (or net profits) from a project as a percentage of the initial cost of the investment.
Posts tagged as “Initial Cost of Investment”
Payback Period (PBP) gives the length of time required for Net Cash Flows (or net profits) to pay back the initial capital cost of the investment.
Appraising investments is a part of the Capital Budgeting Cycle. Investment Appraisal helps to determine the best investment for a business.
Investment Appraisal assesses attractiveness of different capital projects. Projects usually involve a high expenditure and cannot be reversed.
Net Present Value (NPV) of An Investment
BUSINESS MANAGEMENT, FINANCE and INVESTMENT APPRAISAL
Net Present Value (NPV) shows the numerical cash value return from the investment project with taking discounting into consideration.