3140387
Description
Mind Map by David Hernandez, updated more than 1 year ago
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Created by David Hernandez
almost 10 years ago
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SAB7#022 Project Selection Method
- Payback Period
Annotations:
- Choose the nearest Date
- Payback period
intuitively
measures how long
something takes to
"pay for itself."
- Present Value
- The operation of evaluating
a present sum of money
some time in the future is
called a capitalization (how
much will 100 today be
worth in 5 years?)
- The operation of evaluating
a present sum of money
some time in the future is
called a capitalization (how
much will 100 today be
worth in 5 years?)
- Internal Rate of Return- IRR
Annotations:
- Choose the highest
- IRR is a rate of return used in
capital budgeting to
measure and compare the
profitability of investments.
- Cost-Benefit Analysis
Annotations:
- Choose above 1
- CBA is a systematic approach to
estimating the strengths and
weaknesses of alternatives
that satisfy transactions,
activities or functional
requirements for a business.
- Net Present Value - NPV
Annotations:
- Choose the highest
- NPV is determined by calculating
the costs (negative cash flows)
and benefits (positive cash flows)
for each period of an investment
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