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Flashcards in Project Appraisal Deck (6)
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1

Internat Rate of Return

Rate at which the project has 0 NPV

C0 + C1/(1+IRR) + C2/(1+IRR)^2 + ... + Ct/(1+IRR)^t = 0

2

Payback period

Period which elapses until the initial outlay has been recouped

3

Profitability index

(NPV/Initial interest) +1

4

Depreciation Tax Shield

Depreciation x Tax

5

Tax Saving on book loss

Book loss x tax rate

6

Working Capital

Average level of stocks which allows uninterrupted production