Capital Budgeting Metrics: Calculating Payback Period, IRR, NPV, and Profitability Index

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Finance - Personal Finance

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georgepetenjk Created by 10 mon ago

Cards in this deck(5)
The payback period is calculated by dividing the uncovered investment (that is negative) by the _____ next to it.
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Annual cash inflows can be determined by adding cost savings to the product of contribution margin and _____ sales.
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The internal rate of return (IRR) is calculated by dividing the total investment by the _____ cash inflows.
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To calculate the net present value (NPV), use n and i to find the percentage, multiply revenue by this percentage, and then subtract the _____.
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The profitability index is determined by dividing the present value of cash flows by the _____ required.
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