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Unformatted text preview: o Its all about preferences Acceptance Criterion: NPV o Number of years (n) o Interest (i) o Present Value (PV) o Payment (PMT) o Future Value (FV) NPV > 0: Accept the investment NPV< 0: Reject the investment NPV = 0: Marginal Acceptance Criterion: Benefit Cost Ratio o BCR: Present value of cash inflows / Present value of cash outflows o Accept when BCR > 0, Reject when BCR < 0 AC: IRR o Internal Rate of Return: Discount rate at which the investments NPV equals zero...
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This note was uploaded on 08/27/2011 for the course ENGR 185a taught by Professor Staff during the Fall '08 term at UCSB.
- Fall '08