Karteikarten: Investment Valuation and Decision-Making — 9 Karten

Investment decision rule — purpose?

To determine if a project’s benefits justify its costs.

Investment decision rule — purpose?

Determine if a project adds value.

Decision rules overview — key tools?

NPV, IRR, Payback, PI, each with strengths and limitations.

Opportunity cost of capital — definition?

Return foregone by choosing an investment.

Expected return — role?

Anticipated project profitability.

Cost of capital — what?

Required return to attract investors.

NPV — definition?

Present value of cash flows minus initial investment.

IRR — what?

Discount rate with zero NPV.

Mutually exclusive projects — meaning?

Projects where selecting one excludes others.