SAB7#022 Project Selection Method

David Hernandez
Mind Map by David Hernandez, updated more than 1 year ago
David Hernandez
Created by David Hernandez about 6 years ago
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Description

Mind Map on SAB7#022 Project Selection Method, created by David Hernandez on 08/01/2015.

Resource summary

SAB7#022 Project Selection Method
  1. Payback Period

    Annotations:

    • Choose the nearest Date
    1. Payback period intuitively measures how long something takes to "pay for itself."
    2. Present Value
      1. 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?)
      2. Internal Rate of Return- IRR

        Annotations:

        • Choose the highest
        1. IRR is a rate of return used in capital budgeting to measure and compare the profitability of investments.
        2. Cost-Benefit Analysis

          Annotations:

          • Choose above 1
          1. CBA is a systematic approach to estimating the strengths and weaknesses of alternatives that satisfy transactions, activities or functional requirements for a business.
          2. Net Present Value - NPV

            Annotations:

            • Choose the highest
            1. 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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