Investment appraisal

10.3

What the syllabus asks of you

The concept of investment appraisal: the need for investment appraisal
Basic methods: payback, accounting rate of return (ARR): the meaning, calculation and interpretation of payback and ARR (ARR = (average profit / average investment) × 100)
Discounted cash flow method: net present value (NPV): the meaning, calculation and interpretation of NPV
Investment appraisal decisions: quantitative results and their impact on investment decisions
Investment appraisal decisions: qualitative factors and their impact on investment decisions
Investment appraisal decisions: comparison of investment appraisal methods, including their limitations

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All 16 questions on Investment appraisal, untimed — answer on paper, then mark yourself against the mark scheme.

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16 questions

These are structured questions, answered in working rather than by picking an option, so they are not listed here one by one. The drill above puts each in front of you with its mark scheme to check against.