ATARMAxxing · WACE Accounting and Finance revision notes
Capital investment decisions: time value of money, net cash flows, NPV and payback
Recording, processing and communicating financial information
What this note covers
- Nature and importance of capital investment decisions
- Time value of money and present value
- Determining the net cash flow: depreciation and tax
- The net present value (NPV) method
- The payback period method
- Comparing NPV and payback: strengths, limitations and the decision rule
- How this topic is examined and what separates a top response
7 sections · 12 key terms & formulas · 6 common mistakes
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