Module+19000+Formulas


 * //Accounting Rate of Return //**// = Average Income/Original Investment //

//**Payback Period**// = original investment/annual cash flow

**//Net present value: //**

//NPV = //[E CFt / (1 + i^t)] -1 // = P – I //

//Where P = the present value of the project’s future cash inflows and I = the present value of the project’s cost (usually the initial outlay) // //CFt: the cash inflow to be received in period t, with t=1,…n // //i: required rate of return // //t: time period //

**//Internal rate of return: //**

//I = ∑ CF ////t ///// (1 + i)^t //

//Where t = 1, …, n //