Financial Feasibility Analysis Quiz

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$PP = TOTAL hinspace INVESTMENT hinspace COST - AVE. hinspace ANNUAL hinspace NET hinspace REVENUE$
$PP = \frac{TOTAL hinspace INVESTMENT hinspace COST}{AVE. hinspace ANNUAL hinspace NET hinspace REVENUE}$ (correct)
$PP = TOTAL hinspace INVESTMENT hinspace COST + AVE. hinspace ANNUAL hinspace NET hinspace REVENUE$
$PP = \frac{TOTAL hinspace INVESTMENT hinspace COST}{NET hinspace REVENUE}$

$NPV = \frac{sum hinspace of hinspace revenue - sum hinspace of hinspace cost}{(1+i)^n}$ (correct)
$NPV = sum hinspace of hinspace revenue - sum hinspace of hinspace cost$
$NPV = NET hinspace REVENUE - (1+i)^n$
$NPV = \frac{NET hinspace REVENUE}{(1+i)^n}$

$ROI = \frac{net hinspace revenue}{total hinspace investment hinspace cost}$ (correct)
$ROI = \frac{total hinspace investment hinspace cost}{net hinspace revenue}$
$ROI = net hinspace revenue - total hinspace investment hinspace cost$
$ROI = net hinspace revenue \times total hinspace investment hinspace cost$

<p>Rate of increase of investment (A)</p> Signup and view all the answers

<p>To track production inputs, outputs, revenues, costs, and net revenues (B)</p> Signup and view all the answers

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The Simple Payback Period (PP) formula calculates the number of years it takes to recover the initial investment: PP = Total Investment / Annual Cash Flow
The Net Present Value (NPV) formula represents the difference between the present value of expected cash inflows and outflows: NPV = Σ (CFt / (1 + r)^t) - Initial Investment
The Return on Investment (ROI) formula calculates the return on an investment: ROI = (Gain from Investment - Cost of Investment) / Cost of Investment
The Internal Rate of Return (IRR) represents the discount rate at which the NPV of an investment becomes zero, indicating the break-even point

The purpose of preparing a cash flow table is to organize and analyze the inflows and outflows of cash over a project's lifespan, helping to evaluate its financial viability and make informed decisions