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Accounting All-in-One For Dummies, with Online Practice, 2nd Edition
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Accounting All-in-One For Dummies, with Online Practice, 2nd Edition

by Joseph Kraynak
April 2018
Beginner content levelBeginner
768 pages
20h 9m
English
For Dummies
Content preview from Accounting All-in-One For Dummies, with Online Practice, 2nd Edition

Chapter 3

Answering the Question: Should I Buy That?

IN THIS CHAPTER

check Distinguishing between opportunity and incremental costs

check Using the cash payback method to figure when an investment will pay for itself

check Understanding time value of money and the net present value method

check Estimating internal rate of return

check Keeping qualitative factors in your sights

Before investing big bucks in a long-term project, managers must carefully plan all the project’s details and determine how likely it is to deliver reasonable returns for the company. This planning means estimating the future cash flows that the project will bring in and coming to a determination that the project’s cash inflows will exceed its cash outflows (total cost).

This chapter shows you several techniques for making decisions about whether to pursue long-term capital projects. First, it reviews the idea of incremental and opportunity costs — how a project may change some costs but not others. The chapter then describes an easy technique ...

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Publisher Resources

ISBN: 9781119453895Purchase book