INVESTMENT APPRAISAL

An advantage of NPV is

A disadvantage of NPV is that it the discount factor could _____________

An advantage of using ARR is

• It discounts the future value of cash flows

• Shows the profitability of each project

• Easiest method to calculate

• Doesn't calculate profit

Two new delivery vans for PTM's Pizzas will cost £120,000. A net cash inflow of £220,000 is expected. Calculate the ARR 

Which of the following is a qualitative factor impacting upon investment decisions?

• The impact on staff motivation / moral/ subsequent training needs

• The cost of the investment

• Extra revenue generated

• Potential attraction to new shareholders

Forecasting future revenues can be difficult due to:

1) The actions of _________ due to new products they may introduce

2) Changes in d_________

In light of recent events, ff VW revamped their Diesel engines technology, this would be an example of an investment conflicting with ... (pick 2)

• Environmental and ethical issues

• Corporate image

• The state of the economy

• The availability of new technology

This investment appraisal method focuses on the speed at which the initial capital outlay is repaid. Which is it?

• ARR

• NPV

• Payback

• Payback and ARR

The investments that a business makes need to be in line with ______________ objectives and strategy

A business should also consider financial information such as ............. and ................. when making investment decisions

• Gross Profit Margin and Net Profit Margin

• ROCE and Gearing

• Gearing and Working Capital

• Working capital and cost of sales